2022 Boise Idaho Real Estate Blog

Why You Should By A Home This Year

Main Boise Home Loans

Waiting for the bottom line in the housing market could be a mistake. Read on to see why.

Why would anyone want to buy a house these days? You know the price is only going to go down, right? It is predicted that the average American home is expected to be 10% cheaper at this time next year. The obvious thing to do would be to wait and buy next year...right? Well, it may be the obvious thing, but possibly not the only SMART thing to consider.

There are two reasons why buying a home now instead of waiting until next year could turn out to be a good idea:

FORECASTS AND PREDICTIONS ARE JUST FORECASTS AND PREDICTIONS

The rebound in home prices is sure to come, but it will more than likely come when we least expect it. The housing market is in uncharted waters, and forecasting the end to the housing slump could prove to be next to impossible.

Right now, buyers are experiencing the best buyer's market in a long time. Many sellers are desperate, and mortgage rates are very low. Even if the price isn't as low as it may get by next year, you have the power to choose from a huge inventory and negotiate a great price at the same time. Chances are, if you purchase your home at 5-10% below comparable sales, you may be very near the bottom line anyway!

WHILE HOMES MAY STILL BE CHEAP NEXT YEAR, MORTGAGES MAY NOT BE

It is important to understand how mortgage rates are set (see my previous blog entries for more on this topic). Mortgage rates reflect expectations about inflation, and there are many reasons to worry. If you have gassed up your car or purchased milk lately, you understand what I mean there. A 1% rise in mortgage rates between now and next year could net you as much as $25,000 LESS on the mortgage loan you may qualify for.

EXAMPLE:

A 6% mortgage with a $1,500 payment buys a $250,000 loan.
A 7% mortgage with a $1,500 payment only buys a $225,000 loan.

Far be it from me to consider myself the expert on forecasting this volatile market. But that is the point I wish to make...no one has that crystal ball. Underneath all the predictions and forecasts that may or may not come true, today's housing market offers an opportunity to find the house you want and demand the price that you can afford. After all, isn't that what buying a home should look like?

 
Posted by Eric Leigh at 5/8/2008 3:16:00 PM

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