Is Now The Time To Buy?

A recent article at Realtor.org references another article from Time Magazine that both discuss the timeliness of buying or selling a home... today. They both carry differing points of view. Realtor.org is persistent in presenting the fact that homeownership is key to building personal wealth over time. Time Magazine postulates a more insistent viewpoint, that waiting to buy may very well cost you money. The logic goes something like this. If the economy stays exactly as it is, then waiting may bring lower prices. However, as economies change, the very forces that cause the economy to improve will also cause interest rates to rise. To see for yourself how this might work try the following:

Go to the "Services" page of my website, www.bradsNWhomes.com and scroll down to the mortgage calculator. Enter a price of $367,000 at 0 down with an interest rate of 6% and a 30 year term. Then enter a purchase price of $331,000, 0 down, interest at 7% and the same 30 year term. What you'll find is the same payment of about $2200/month.

Think about that for a moment. If interest rates rise even modestly to 7%, home prices would have to fall by over 10% for your purchasing power to remain unchanged. In Seattle, not likely. While inventories are growing and prices have probably peaked, local job growth will continue to influence home prices for the foreseeable future.