How Low Will These Mortgage Interest Rates Go? Get In On The Action Now!

Watch on your mobile device >>

Even though interest rates have been repeatedly mentioned lately, the rates are so unprecedented that we need to bring them up again. Just look at any market and you will see that mortgages continue to cost less than ever, despite the expected rise after our recent debt ceiling scare and subsequent stock market volatility. For anyone even remotely considering the purchase of a new home, an investment property, a second vacation home or a rental income building – this could not be a better time. In this article, we talk about and compare some of the advantages of buying now and the reason why these rates translate to thousands of dollars of savings in the long run.

Low Interest Rates Plus Great Housing Prices

When you factor in the very low rates available these days, in some markets as low as 3.875% on a 30-year fixed rate mortgage and 3.375% on a 15-year fixed rate mortgage – reduced housing prices these days look even more attractive. Since we are in a down market, and have been in one for a while now, housing prices have continued to plummet and though it is a very grim picture overall, it means affordability for buyers. Coupled with the lowest cost in recent history to borrow, buyers have it made.

Historically Low Interest Rates Plus Lots of Inventory

The current economy has unfortunately meant many homes on the market with millions of distressed sales going on throughout the country. Though we are seeing fewer foreclosures and more short sales, still the number of houses available – housing inventory is quite high in many markets. As a buyer, when you are armed with a locked-in low interest rate, the selection of homes to choose from with currently high inventory levels is an added bonus.

Little Down Payment and Low Mortgage Costs

The government is trying very hard to make it easier for consumers to become homeowners. Even though the mortgage industry has gained a bad reputation lately for being “too picky” and scarcely offering new mortgages, the reality is that now is a great time to buy. Government insured home loans, like FHA loans, make it possible for homebuyers to get in with as little as 3% down. As opposed to the conventional thought that 20% is needed, 3% is a far more attainable goal for many and makes the difference of being able to get in on a home purchase. Merging low interest rates with a small down payment makes it even more attractive to buy these days.

Leverage With Sellers and Low Interest Rates
Since sellers are competing against countless others and there are buyers out there actively seeking homes, the market is not as stagnant as news reports may have you believe. One advantage that buyers do have, however, is leverage that they had not enjoyed as much during previous markets of stability. These days, buyers can obtain considerable concessions from sellers, ranging from getting them to pay their entire closing costs, to paying for buyer-initiated appraisals to even throwing in extras. Again, adding in these factors with all the other advantages of buying in today’s market and low interest rates is added icing on the cake.
Each family is different, with a different set of circumstances affecting each outcome. Some may be concerned with needing to pay a large amount of cash down, while others may find that there is not enough equity in their home to take advantage of the low rates and refinance their existing home – but by consulting with your Realtor, you will discover what opportunities do lie in the existing market so you are not one who might live to regret not availing this fantastic chance to buy and own a home for so little. After all – what comes down, must come back up; that is true not only for interest rates but also for housing values, making it a win-win situation for those who jump on the bandwagon.

Looking Ahead to the Coming Months and Years – the State of Our Market

Watch on your mobile device >

There are three states that experience real estate market trends anywhere from six to twenty four months prior to the rest of us and those trends usually emulate the same thing that will end up happening in our markets.  To understand what has been going on, we make an effort to explore those trends by connecting with the top real estate agents from those areas at a yearly coaching convention for top agents.

This year, we are seeing some interesting trends that point us in a positive direction; some that gives us hope and that will hopefully help us deal with the truth of our current state of the market. 

Short Sales An Up and Coming Trend That Continues

Based on our insight obtained from previous visits to the real estate coaching convention, we were able to be prepared in advance when short sales came to our neck of the woods.  In 2008, when the first distress sales started to hit our area, we were ready for it.  Using insight obtained from our colleagues’ experiences in other regions that had experienced the same phenomena before we did, we were able to develop systems that allowed us to manage short sales and distress sales efficiently and effectively.  At the present time, we are experiencing an average of about five to ten percent of sales in our market being short sales.

Rock Bottom Hasn’t Hit Yet

While there is a promising future ahead, unfortunately there is still a fair amount of time that we need to go through before that rock bottom hits and things start turning around in a concrete, measurable way.  The good news is that in Florida, one of the markets that precedes our own market’s activity, inventory levels are beginning to drop.  Since Florida is about 2 years (24 months) ahead of us typically, this gives us something promising to look ahead to.

Buyers Are Aware and They Are Everywhere

During this period of increased inventory levels, extremely low interest rates and fantastic low prices available, home buyers are on the rise and there continues to be an increase in buying activity.  Not only that, there are many first time home buyers who are capitalizing on the benefits available out there to encourage first time home purchase, such as down payments as low as 3%, down payment assistance and other perks if financing is done through government backed programs such as FHA or local state agencies.

Moving On Up – To a Bigger and Better Place

Many existing homeowners are taking advantage of market conditions – once again, the low interest rates, low home prices and sizable inventory levels – to utilize their existing equity and move up into a better property.  These are typically people who might have moved in a few years time anyway but realize that depreciation has not yet hit rock bottom so now is the best time to move into more house for about the same money.
Throughout the next couple years, things will indeed fluctuate as the nation deals with the debt crisis, downturned economy, inflation and more.  But many property owners are seizing opportunities that are out there and utilizing programs that are set up to help consumers get through some of these rough times.  Depending on which side of the fence you are on, this is also the best time to be engaging in real estate transactions.