Recently I have been getting a number of questions from my prospective clients about buying a home in this economic climate. They have legitimate questions and I wanted to share my general thoughts and industry research with all of my readers:
Will Home Prices Get Better If I Wait?
Over the last year the average home price in the Greater Cincinnati area has fallen by about 13%. As an agent I am seeing more buying activity, and that active buying is shrinking the number of homes in our inventory. With less supply and stable demand home prices will go up. Although it will be a slow recovery a Baylor University economics study showed that 8 or 10 economists polled believe that home prices will rise in the next 5 years.
Will Mortgage Rate Be Lower If I Wait?
Rates are at 50 year lows. Interest rates are fluctuating between 5% and 6% which is a substantially lower than the 15% interest rates of the 1980’s. I wrote a previous post about the buying power that small changes in interest rates can have on a 30 conventional loan.
Will There be More Houses to Chose From If I Wait?
There are currently 14,182 homes for sale in the MLS of Greater Cincinnati. One year ago that number was 16,680. Two years ago it was 17,880. The difference was that we were in a sellers market and there were eager buyers, easy mortgages, and fast sales. Activity was high because people were moving up. With the economy in its current state people are staying in their homes, hence the lower inventory. There will be different houses if you wait, maybe not more.