Now is the Time for You to Get off the Fence and Buy!

24 Jan

Buyers click here to search all area homes for sale.

Now is the Time for You to Get off the Fence and Buy!

Today I wanted to talk to you about purchase price. There seems to be two major reasons for keeping people on the fence about purchasing a home. Those two items happen to be the increasing price of homes in the area and rising interest rates. As you may have heard, the market is back up to the numbers we saw in 2007. A good part of that is that interest rates are still low. However, buyers are weary of the interest rates creeping up from its historic lows.

There is a key piece of information you should understand: the longer you wait, the harder it will be to get into the home that you had picked out because your purchasing power is dwindling. This is because the Federal Reserve has been artificially inflating the low interest rates by purchasing bonds. In January, they announced that they were going to cut back the purchase of those bonds.

Monthly, they average about $85 billion. They have cut back $10 billion, but they are still assisting with the interest rates. However if we see unemployment scale back, banks will scale back on their lending as well. This will cause interest rates to rise and the government to back out purchasing those bonds. As of now though, interest rates remain at historic lows.

As an example, say you are planning on purchasing a home in the $350,000 category at 4% interest rate, your monthly payment would be around $1,500. However, if the interest rises by just one point to 5%, that same budget would only allow to purchase a property at $311,000. That is quite a difference and you are still able to get more bang for your buck if you were to purchase now.

Average Purchasing Price from 2001-2013

Sales 2001-2003 Sales 2004-2006 Sales 2007-2009 Sales 2010-2012 Sales 2013

If you have any questions, give me a call at (502) 220-HOME (4663). Thanks and I look forward to speaking with you. Have a great day!


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