While falling values are not good indicators for sellers, they’re great news for buyers, lifting affordability to historically high levels.
For example, to purchase a median-priced home of $164,600 with 20 percent down and an interest rate of 5.1 percent, a buyer would need an annual income of just under $35,000.
With the lowest interest rates we’ve seen in 40 years, now is an opportune time to lock in a rate on a fixed loan.
Rates are already showing signs of rising, and waiting too long could negatively affect your ability to secure such a mortgage.
In addition to rising interest rates, the fees on loan applications may also start increasing. This is because lenders have reassessed their risk-to-reward ratios in light of all the recent loan defaults.
Around the corner, we might expect higher mortgage insurance premiums and closing costs, not to mention tougher and tougher terms for qualification.
With interest rates and loan fees still at very affordable levels, now is the time to make your move and secure your financial stability through home ownership.
If you buy a $150,000 home today and it appreciates at a very conservative 3 percent annually, that home would be worth nearly $164,000 in three years.
Don’t let all the negative stories about real estate blind you to the many positive factors for buyers in today’s market.
The Placer County Association of Realtors is the professional trade association representing approximately 2,700 Realtors, affiliates, and other related representatives.
