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Interest Rates Are Low: Now is the Time to Buy a House 

Interest Rates Are Low: Now is the Time to Buy a House 

If you’ve been dreaming of owning your own home, is now the time to make it a reality? With low-interest rates and home prices, now could be the right time to buy. While the decision is more complex than just looking at a few factors, waiting too long could backfire. Housing supply could decrease - which raises prices - and interest rates will go along for the ride. Do your homework, look at different properties, weigh the pros and cons - and see if you’re ready to make your move. 

There are several factors that make 2019/2020 an advantageous time to buy a home:

 

  • A healthy economy
  • Low unemployment
  • Increases in average income
  • Low inflation
  • Low-interest rates
  • Competitive mortgage lenders

Right now, the average US 30-year fixed rate is 3.6% - an astonishing 2% drop. So what does this mean for you? Let’s say that you are buying a $350,000 house and you put 10% ($35,000) down. That 2% decrease means savings of more than $300 each month.

Mortgage lenders are competing intensely for business, and this is always good news for the consumer. It means that you don’t have to settle for the first loan option. You can shop around, compare rates, and negotiate terms. For example, you may be able to get your lender to drop certain fees, which are often referred to as “junk fees.” These include charges for document preparation, application, automated underwriting, and verification of employment. This can save you a significant amount at closing.

Now, just because economic and housing market conditions are great doesn’t mean it’s the right time for you to buy a house. Before you make your decision, ask yourself:

  • Am I financially secure? 
  • Do I have good job security? 
  • Do I have too much debt at this point? 
  • Will I be getting a raise or bonus soon (to help with closing costs or down payment)?
  • Am I in it for the long haul? This is a long-term decision, so be sure that you’re ready mentally as well as financially. 

Another consideration to keep in mind is that, if the economy cools or prices and interest rates fall even lower, you may pay more for a house in 2019 than you would pay for the same house in 2020 or later. This is always a factor when purchasing a home: it is difficult to time the market, so to speak, or anticipate its movements precisely. 

When considering whether to buy a house now, it’s important to know what’s going on in the housing market, but it is also important to think about your own readiness, financial circumstances, and needs. Again, is it the right time for you

The RealStar Homes team is here to help you answer these questions: we combine targeted market insight with a careful evaluation of your specific situation and needs. By this time next year, you could be decorating your own home for the holidays.