The sad fact of real estate is that you can never “time” the market. Everyone always asks, “Where’s the top?” or “Where’s the bottom?” Of course, you never know until you pass it and
home sale prices and mortgage interest rates move in the opposite direction.
That is what is happening to mortgage rates now. The government, through the Federal Reserve, has been trying to drive down interest rates in order to make home buying more attractive and more affordable. They have provided the $8,000 First Time Home Buyer Tax Credit to put a little extra cash in to home buyer pockets. The government has even allowed home buyers to use that $8,000 tax credit toward closing costs which can include paying loan discount points which, in turn, will lower the mortgage interest rate a home buyer would obtain. Can you imagine having a 30 year fixed mortgage with an interest rate in the low 4% or high 3% range? It’s possible if you structure the loan properly with the $8,000 first time home buyer tax credit.
However, since consumer confidence is rising, the stock market is also rising. When the stock market rises, the bong market decreases and mortgage interest rates increase. Sound complicated? It is. I only wish that when the Chairman of the Federal Reserve, Ben Bernanke, spoke interest rates would go down. They don’t. Mortgage interest rates are tied to the bond market.
What this really means for home buyers is that the time may be past to grab the absolute lowest mortgage interest rate in the history of mankind. It still means that interest rates below 6% are still readily available to qualified home buyers with good credit. verifiable employment and income and some money in the bank for a down payment (3.5% for an FHA mortgage).
The moral to the story is that you can never really predict the absolute best time to buy a home. Some people manage to do it by luck. They see a good time to buy a home, they find a great home and a nice neighborhood and they make the home purchase. Others look at charts and trends, ask around and then decide that this time or that is the right time to buy a home.
Speaking of trends… you can get real time real estate market trends for 10 zip codes in the MD Suburbs just by filling in the form to the right under Real-Time Market Trends. You can also click on the link that says “Market Trends” at the top of the page. The report will be e-mailed to you and it is absolutely FREE. Sign up today to stay completely up-to-date on current real estate market trends in the MD Suburbs.










