I’ve been screaming to anyone who will listen this past year that it’s a great time to sell a home, buy a home, invest or build. I was constantly telling everyone that interest rates are historically low and that home prices are not “low” they are “realistic” which is what they weren’t over the past 7 to 10 years. Rarely is the real estate market “balanced” so-to-speak, meaning rates are low and home prices are where they should be. I’ve seen rates low and home prices high or rates high and home prices low but over the past few years, we’ve had historically low mortgage rates and incredibly realistic home prices. Buyers can get a mortgage and feel comfort in knowing that for the next 30 years, their rate is not going to change and it’s lower than it’s ever been. Home buyers can also feel comfort in knowing that the home they just purchased is worth what they paid for it and not some over inflated, made up price. Home owners can feel comfort in knowing that they can sell their home for what it’s worth, pay off their mortgage and then turn around and buy another home for what it’s actually worth and not get taken to the cleaners.
So, what’s going to happen in 2013? Will mortgage rates stay historically low or will they soar? Even if mortgage rates were to rise to 5 or 6 percent, that’s not high. We’ve been spoiled for so long that the talking heads will get on the tube and start screaming to the masses, “mortgage rates are going to sky rocket to 6%” just to try and create some sort of real estate frenzy. We’ve had rates at 5 and 6 percent before and people still purchased homes. Is it better to have a 3% mortgage rate over 6, you bet but it wouldn’t be the end of the world if it wasn’t.
The moral of the story is, if you can purchase a home now, it’s a great time to do it because you will certainly kick yourself when interest rates rise but if you happen to miss the low interest rate boat, don’t worry, you can jump on the not so low but still low enough interest rate boat when it comes by.
Renée Porsia is an Associate Broker with Prudential Fox & Roach and published writer. Renée Porsia services Philadelphia, Bucks, Montgomery Counties and New Jersey. If you would like to read more of Renée Porsia’s articles you can go to http://www.reneeporsia.com.
- Freddie Mac: Mortgage Rates to Stay Low, Property Values to Rise in 2013 (blogs.wsj.com)
- How Much Is the Fed Driving Home Prices? (ritholtz.com)
- Are Mortgage interest rates going up? Who will be affected most? (bayarearealestatetrends.com)
- The Perfect Real Estate Market for First-Time Home Buyers (businessinsider.com)
- Some Bullish 2013 House Price Forecasts (calculatedriskblog.com)