I have been encouraging clients to try and buy as soon as possible. While MRIS has indicated overall improvement in existing home sales, they expect prices to drop more in the next quarter, creating an interesting conundrum: Wait until tomorrow because maybe it will be cheaper! That has been the cause of much of the drop in home sales for the past few years. I will explain why now will be the best time to buy.
Vince Farrell at CNBC (you can read his article here) echoes some of these concerns in his article today. It appears that interest rates may be affected by the issuance of billions more in Treasury bonds that helped drop the Dow Jones average by 150+ point yesterday. It also saw a 0.12% increase in mortgage rates. He also mentioned the problem of the “shadow market”- many of the foreclosed homes waiting to find their way to a multiple listing service near you. A new flood of homes MAY cause home prices to drop again, with the surplus inventory flooding the market as it has in recent times. However, interest rates MAY go up, costing home owners more money per month as opposed to the up front savings on the asking price.
I humbly submit that June will be the best time to buy a new home. Interest rates will still be below 5% if you lock in now and purchase a home in the next 30 days. Act quickly- these days may not be here for long!
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