I was talking with a trusted lender who said he had been thinking about this very question and felt it was rarely beneficial to wait if you're ready to buy. The two primary factors to consider are rising interest rates and falling housing prices. He calculated that if interest rates rise .5%, housing prices would have to fall another 5% to make up the difference. Overall housing prices are currently relatively stable, neither rising nor falling significantly, indicating waiting isn't likely to be of benefit.
The past decade has been one of low interest rates coupled with unsustainably high home price appreciation as the supply of homes available for sale struggled to keep up with demand. As a result, home prices increased a dramatic 50.6% from 2000 to 2005. Unfortunately, consumer income didn't keep pace with housing prices, rising only 12.9% during the same period. This resulted in decreased housing affordability, which planted the seeds for our current market conditions.
In 2006 we saw a needed pause in the market...not only natural and expected after unsustainable price growth, but much needed to put our market back in balance. Home price growth stabilized in 2006, with prices relatively unchanged over 2005. Jeff Allen, Minneapolis Area Association of Realtors Research Manager, predicts that 2007 should be pretty stable with 2006 overall, with a bounce back beginning in the later part of 2007.
Flat housing prices and continued historically-low interest rates have improved affordability, creating a good environment for first-time homebuyers...a necessity for a continued healthy and growing housing market. If you're ready to buy, it's a good time to make a move.
Click to see the full Twin Cities Metro 2006-2007 Market Analysis by Jeff Allen, MAAR Research Manager.
No comments:
Post a Comment