Waiting for what? Who knows, but they may be waiting to be certain that the market is really stable before they jump in. Many of those who wait much longer may end up with the classic "goose egg". I harp on interest rates allot on this blog but I cannot overvalue how critical they are for the majority of home buyers.
Last year a garden variety three bedroom two bath home say a 1970s ranch with 1200 square feet and 7000 foot lot would have sold in an average quality neighborhood for $140,000. So let's compare an FHA buyer for that house last may, this May and projected for next year in May.
|Payment difference estimated (consult mortgage professional), click to enlarge|
The federal government has been buying mortgages at low rates in an effort to spur the real estate market back from the severe beating it took in 2007-2011. Now that the market is showing strength in its recovery, the fed is poised to ease back on the rate subsidy. I am seeing more and more economists predicting significant increases in mortgage rates over the next eighteen months.
If you were waiting for the bottom of the market, you waited a little too long, now you are chasing it uphill. Don't let it get away from you. Now is the time to secure your dream home while it is still affordable.
Here is data for our metro area:
Updated May 9
First Quarter 2013
Median Home Price
Yr. Change: 18.2%
All Metropolitan Median Prices