For many potential home buyers, the sense of urgency to purchase is quelled by low interest rates and surplus supply of residential real estate. Instead of acting now, buyers are hanging out on the sidelines to see just how far prices will drop. But a recent article in Realty Times makes the argument that there isn’t as much time to wait around as we might think. There’s a certain economic factor called inflation that plays a hand in every sphere of consumerism and with the way the cost of other goods are going up right now, it’s only a matter of time before housing gets hit, too.
We’ve all noticed the rise in prices, from gasoline to groceries, everything is getting more expensive. It’s affecting every facet of American life and pretty soon the American dream of owning a home will also reflect the influence of an inflating inflation rate.
Already mortgage rates show signs of increasing – the average 30-year fixed mortgage rate went up last week to 6.2%. Mortgage rates are known to jump around – in January the 30-year fixed fell to 5.57% and then leaped to 6.4% in February – but what economists fear is that home loan rates won’t bounce back down again this time, at least not the way we’re used to.
Rent is expected to contribute to housing cost inflation because average rent rates are being driven up as a result of the current residential real estate conditions. With stricter lending standards, fewer new homes built, and higher unemployment, the demand for apartments is rising and allowing landlords to elevate rents, too. That means buyers may not be able to save up funds by renting like before.
So what can we do to avoid feeling the financial squeeze on the “home front”? Lock into low fixed mortgage rates now. Home buyers can still get in at around 6% and homeowners wanting to refinance can secure a good percentage. Inflation is something no one can afford to ignore, so talk to your Realtor today and find out what the best move is for you.
Posted at 03:56PM Jun 02, 2008 by Spencer Mason in General Comments[1]
Thanks.
DR
Posted by David Reed on August 04, 2008 at 08:47 PM CDT #