“Right now may actually be one of the best times to buy a home.”
That encouraging statement is sweet music to the ears of potential home buyers and is the primary message of a full-page ad in Florida’s largest newspaper this morning, part of a $40 million multi-media advertising campaign recently undertaken by the National Association of REALTORS (NAR), an initiative that includes spots on broadcast and cable TV, radio and print outlets.
The full-page newspaper ad, which appeared in the St. Petersburg Times on Friday (March 2), quotes former U.S. Federal Reserve Chairman and financial guru Alan Greenspan, who says that “most of the negatives are behind us,” and is part of an overall initiative by NAR that began in mid-January to cajole potential home buyers into delaying their decision no longer.
Why is now a great time to buy? Even if you merely considering a move and don’t plan to complete the move for 6, 9 or 12 months, now is the time to set the process in motion.
Low interest rates, inventory surplus, price stabilization, a favorable economy and investment potential are among the reasons NAR cites for its optimism. Let’s look at each of these.
■ Interest Rates: “Today’s (mortgage) interest rates are comparable to 40-year lows, offering buyers a once-in-a-lifetime opportunity,” NAR proclaims in its ad.
Indeed, the national average for a 30-year fixed loan is currently 6.22 percent annually, down .08 percent from last week. Other loan rates, such as a 15-year fixed, a 1-year adjustable rate mortgage (ARM) and a 5/1-year ARM are all under 6 percent, while the federal prime lending rate is now 8.25 percent.
Home buyers should always shop for a mortgage as carefully as they shop for a home. Family income, expenses and the value of the home all affect mortgage rates and banks compete aggressively for these rates, which is good for consumers. As little as half a point difference on the interest rate can translate into thousands of dollars extra per year spent or saved on mortgage payments, depending on the value of your home.
■ Inventory Surplus: “There are currently 3.75 million homes for sale” in the U.S., NAR says. It’s definitely a home buyer’s market. Anxiety among sellers is high because, as NAR says in its ad: “We have had a record inventory of homes on the market in recent months, offering consumers the greatest choice in decades.”
As any economist will tell you, excess supply drives down the price, forcing sellers to be more realistic about what offers they will accept. NAR says the “large inventory won’t last” and when the supply of homes decreases, prices will go up.
■ Price Stabilization: Home prices overall have stabilized, NAR declares: “Contracts for homes sales are up and the outlook is for home prices to increase” in 2007.
So if you snooze, you could lose on getting the lowest price.
The national median price for existing homes, including single-family residences, townhomes, condominiums and co-ops was $210,600 in January, 3.1 percent lower than the median price in January of 2006.
The January total housing inventory was up 2.9 percent to a supply of 3.55 million existing homes available for sale. That represents a 6.6-month supply at current absorption rates, the same as in December. NAR expects existing-home sales to gradually rise this year.
New home sales figures appear to be holding up fairly well, NAR says, with the median sales price of new homes sold in January at $239,800 and the average price at $313,000, both up slightly from December. There are about 536,000 new homes for sale nationwide, a 6.8-month supply at the current rate of sale.
■ Favorable Economy: NAR quotes Greenspan, a leading authority on American domestic economic and monetary policy, saying that housing prospects are looking up: “Most of the negatives in housing are probably behind us.” NAR adds: “2006 (was) the third-best year on record for home sales.”
■ Investment Potential: “The national median price of homes bought 10 years ago has increased 88 percent,” NAR says in the ad, a rate that well outpaces inflation and most other investmants that are not high risk. “Home ownership remains a safe, secure way to build long-term wealth. The number of U.S. households is expected to increase 15 percent during the next decade, creating a continued high demand for housing.”
The conclusion is obvious: Now is a great time to buy a home.
New Homes Realty, Inc. can help you find the perfect home, whether you seek a new home or an existing home. Our exclusive network of Buyers Agents are licensed real estate agents who represent only you, the buyer, not the seller or the builder. And Buyers Agent services are free to home buyers. Discover the difference of New Homes Realty and newhomes.com. We’re changing the way America buys homes.
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The Author: admin
Website: http://www.newhomes.com
About: Frank has 11 years of Internet marketing experience within the real estate industry. As Director of Internet Marketing at American Home Guides, Frank was responsible for the creation and implementation of all search engine marketing. He developed a network of over 400 web sites that brought in over 2.5 million visitors a month.
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on Friday, March 2nd, 2007 at 5:08 pm and is filed under Real Estate News.
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