This is the question that I get asked more than most – other than maybe "what are interest rates going to do?". It's really hard to answer either question as it depends on your situation.
Fannie Mae's Chief Economist Doug Duncan offers a simple answer, "If at today's interest rates and house prices, they can find the house that can fit their budget, they should buy." And that is truly the easy answer – if you find a home you like and you can afford it, then it's a great time to buy!
If you are waiting for interest rates to drop, maybe for home prices to drop, we never know where the bottom is until the rates or prices have gone back up. Then it's too late. With the Fed raising rates in December, we know that the Fed does not expect to drop rates again – they are more likely to raise rates again. It may not be this next meeting, but could be this summer or next fall. It will depend on what happens to the economy.
When I get the question "what will interest rates do", part of my answer may be "if I truly knew the answer to that, I would be sitting on a beach somewhere!". No one knows, we just give educated guesses based on what has happened in the past and what is going on in the economy.
The best answer is basically what Doug Duncan said – if you can find a home you want and you can afford it, buy it! We know rates will eventually go up and so will home prices. Yes, there is a chance they may drop some, but the chances are much higher that they will go up rather than drop. Find out what you can qualify for and start looking. As we get closer to spring, there will be more homes on the market, but they may be priced higher than they are right now.
So if you find a home you like, can afford it and are qualified to buy it, then it is a great time to buy!!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc, An Equal Housing Lender, NMLS#150953 - Email - Website
