The housing market is taking off again — finally! — not only in the Boise area, but also around the country. This is great news for sellers, but what about buyers? What’s the good news in a market where competition for prized properties will increase, home prices are rising and mortgage rates might too?
More Choices, Better Living
In the first place, a healthier housing market means more desirable locations to purchase property. Locations that had been suffering from a double whammy of high unemployment and a terrible housing market — often with numerous abandoned and vacant homes — are seeing a turnaround, providing homebuyers with more choices when it comes to finding a place they want to live. These areas can only improve as families move in and contribute to the local economies.
In fact, according to the National Association of Home Builders/First American Improving Markets Index, at the beginning of October, 103 markets across the country were considered to be improving. The index looks at employment, housing prices and single-family housing growth to determine these improving areas. They include metro areas in Florida, Texas, Indiana, Michigan and many more throughout the U.S.
In addition to more cities becoming desirable places to live, real estate is more obviously becoming a good investment. We say “more obviously” because despite the recent slump, in the long run real estate turns a profit in nearly every market. Period. Now your clients will be able to see that for themselves, as prices slowly creep up. Whether they are looking for a primary home, second home or investment property, now is a great time to get into the market.
Buy low, sell high is a very old sales adage and one that should be taken advantage of in this market! Buy soon before prices rise any more, so you can maximize your profits when you choose to sell.
Delays Can Hurt Purchasing Power
Remember, too, that while mortgage rates have been hovering at record lows, there is no guarantee they won’t begin to climb — and keep going. Improvements in the economy, of which housing market improvements are an indication, will surely stimulate a rise in mortgage interest rates. As we’ve said before, even a rise of one percentage point lowers a buyer’s purchasing power by about 10 percent. That’s often the difference between affording a house in the $300,000 range versus the $200,000 range.
Here’s a graphic to help you understand the difference between the COST of a home and the PRICE of a home. The cost is determined by the price and the mortgage interest rate which is available at the time. Below is a list of the interest rates over the last ten years and the impact they have on a $100,000 mortgage payment:
dean and shanna tucker boise mortgage