I passed an outdoor bulletin board a while ago in front of a real estate office (not mine 
) and it said "Media Hype Sells Papers. We Sell Houses." and I thought to myself "yes, that's true". I actually watched a guy on the Today Show around that same time telling people to absolutely not buy a home right now saying it's a bad investment. The realtor that they had on to dispute him pointed out that while it is an investment, for most people it's a home first...a place to settle down and live.
Yes, the market has changed drastically from a couple of years ago, but the truth of the matter is that if you are looking for a home to live in for several years or more, now is a great time to buy. There are mortgages to be had, some even with 100% financing. Interest rates are still low and there is a ton of inventory to choose from which means you can often negotiate the sales price to your advantage. It's been predicted recently that interest rates will start to rise, so now may be the time to make the leap and purchase a home as the interest rate can seriously effect your monthly payment more than the purchase price itself.
If you want to buy a home, but are not convinced that now is the time, ask yourself some basic questions...why do you want to buy? how long do you plan to be in this home? What is your job outlook like? If you're just looking to flip a house or stay in it for a relatively short period of time, then now may not be the best time to buy. But most people are looking for a place to call home, more than just a roof over their heads. Despite the current market, real estate is still a good investment over the long term. And studies show that most people stay in a home for a minimum of 7 years.
Next, take a really good look at your financial situation; your credit, your income, your bills. A mortgage broker or your bank lender can help you compile this information and tell you if you would qualify for a loan and at what rate. It might also be worth your while to speak with two or three different mortgage people to compare terms. Be sure you understand the terms of the loan and you feel comfortable with them. Adjustable rate mortgages have gotten people in trouble because they start at a low and very affordable rate, but the rate adjusts in a couple of years and it can make your payments increase dramatically. People often think that their situation will improve in a few years and so they'd be able to handle the increase, but often this just isn't the case and you end up stuck with a mortgage you can no longer afford. You have to be realistic especially with the economy is a very uncertain state right now.
If you're not getting quoted the rate you'd hoped for, talk with your mortgage lender about your credit. Sometimes improving your credit score can help you qualify for a better rate. Find out about what you can do to help improve your score whether it's paying off some bills or being sure to pay on time consistently. A lower interest rate can effect the amount of your monthly mortgage payment more than knocking off thousands of dollars from the sale price of the home.
Get pre-approved, not just pre-qualified. There is a difference. A pre-qual is just a preliminary idea of what you can afford. A lender will tell you the amount they feel you can afford based on some basic information that you give them. Getting pre-approved means providing actual documentation as well as a credit check which gives a more definite picture of what you can afford. And don't go on any spending sprees or change jobs after getting pre-approved, because lenders often will check your status and figures again throughout the buying process.
So you've decided you need a place to put down roots, your credit is in good order and you're pre-approved for a loan at a good rate. Why then wouldn't it be a good time to buy? Part of the reason why all the media hype has scared people off is because folks aren't going out there and getting the facts. If you do your homework and check into these things as discussed here, then you may find that for you, this is the perfect time to buy.
Everyone's situation is different. But if you have a dream of homeownership and the only thing keeping you from pursuing it is all the negative news in the paper and on TV, it's time to start doing your research. Be armed with the information you need to make an informed decision about what's best for you and your family. I personally wouldn't want to waste money on rent if I knew I could get a decent fixed rate for a home of my own. Isn't it worth a shot?
Still with gas prices soaring and job stability becoming more shaky, a lot of people are scared to take the plunge. I'm interested in hearing from you about why you are putting your home buying on hold. Is it the uncertain economy? Do you have to sell your current home and feel you can't get a decent price for it? Are you still waiting for prices to come down more? Is it a combination of factors or something else?
I'd love to hear your input so I can better understand and serve my clientele in this crazy market and I might also possibly be able to address some concerns you might have.
Thanks for your time and comments!
Maria