IS IT TIME TO BUY A HOME?

In 1992 mortgage rates were double what they are today.  Today's FHA 30-year fixed-rate is between 3 and 4 percent; in the 1980's it was between 13 and 18 percent.  Interest rates are at a historical low and homes are at their most affordable prices on record.

However, it has been noted in recent news articles that home prices are on the rise again with prices jumping "4.6% nationally in August compared to a year ago - Utah being one of the states seeing the greatest increases at 8.9%**." 

It has also been noted that previously occupied home sales are also on the rise.  "Sales of previously occupied homes jumped in August to the highest levels since May 2010. And the lowest mortgage rates on record have made home buying more attractive**."

Furthermore, home building permits for a 12-county area along the Wasatch Front were at a blistering pace in August, 28 percent year-over-year and generally have been on an upward trend each month from a year ago.

What does this all mean?

The best opportunities in real estate may be right now!  If you are waiting for better interest rates... can you afford to wait?  Supply is shrinking and demand is increasing.  Sales of new and previously owned homes have been slowly improving this year, and home prices are starting to show consistent gains in Utah and nationally.  Even if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

What if you are a current homeowner wishing to upgrade?
While it is still a buyers market, it is beginning to move to a more neutral market.  Current home owners interested in upgrading are perhaps in one of the best opportunities.  If you are a homeowner considering upgrading, but want to wait until your current homes improves in value, you may actually loose money!  Consider this:  If you wait to sell your current home until the market has increased another 4% the new home will have increased 4% as well!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

If you are on the fence today... it is time to get off that fence and act!



**  http://www.standard.net/stories/2012/10/02/utah-sees-dramatic-increase-home-prices
**  http://www.sacbee.com/2012/10/02/4873735/corelogic-august-home-price-index.html