Housing Market: Even Lower Home Prices?
Market research shows that the housing market will continue to decrease this year and in 2012, reaching the bottom by the end of 2012. This means that for those who want buy a house but are afraid of losing equity, buying now could be the best decision.
On May 9th, Zillow’s chief economist, Stan Humphries, said conditions forced the company to downgrade its housing market outlook for 2011. Humphries said “weak demand for housing and high supply will ultimately drive these price declines.” Zillow believes that we will reach the bottom from late 2011 to 2012 at the earliest.
This is not really anything new to homeowners and prospective home buyers, but it’s great reinforcement for those who follow Warren Buffet’s tip of “buying low, selling high.” Buffet is one of those investors that believe that timing is everything, and housing is not an exception.
Interest Rates May Go Up In The Near Future
Another factor to keep in mind in the home purchase equation is the fact that interest rates are still very low. Some may say that it’s wise to wait until home prices really bottom out, but interest rates may be higher by then. This is why it couldn’t be a better time to buy a home!
Could The Worst Be Over?
Others believe that we’ve already reached the bottom of the housing market. CNN Money published an article on May 19 about the housing crisis and a sign that we have already reached bottom prices. CNN says that the mortgage delinquency rates are falling. The Mortgage Banker Association’s chief economist, Jay Brinkmann, believes that this is a strong sign of an improvement in the housing market.
One reason why mortgage delinquency rates are falling may be improving consumer confidence. When people see less lay-offs and an increase in hiring, they feel more comfortable to buy a home.
One thing is certain, if you’re considering buying a home, make sure that you do your research and get informed. Everybody has his or her own opinion as to whether we have passed the worst or if it’s yet to come. The wisest thing to do is to look at your own financial situation and, if you think you are ready to buy a home, definitely take advantage of the buyer’s market!