August 4th, 2010 6:10 PM by Rudy Antle
1. The “lowest interest rates in 52 years”—that’s what a lender told us at our office sales meeting this morning. One lender sent out an email last Friday saying FHA loans were available for 4.25%. Conventional loans are a bit more, but still well under 5%.2. Housing prices are bottoming out in the Denver area, and are starting to go up—slowly, but still going up.3. Foreclosures, short sales, and bank-owned properties are still available and giving outstanding bargains in many cases.4. Because it is still a Buyer’s market, many homeowners are fixing up their homes to get them ready to sell, which in a Seller’s market they don’t need to do.5. Lenders are loaning to qualified buyers. Regardless of what you may have heard, there is money available for residential mortgages.6. There is still help for first-time home buyers. The $8,000 tax credit is no longer available, but there are other programs that can help those who need some help.7. OK, you ask, this sounds like it’s a good time to buy a home, but if I want to move up, I have to sell my home. I want to wait until the market gets better so I can get a better price for my home.That sounds reasonable, except that for you to move up, someone needs to buy your home. The above factors will make it easier for them to buy yours, so you can move up.8. If you wait until the market for your home gets better, the market for the move up home you want to buy will also get better. Will you be better off waiting, or will it essentially be a wash?9. How many of the above factors will be the same a year from now? Just one example helps clarify the issue. If interest rates go up, buying power goes down. I recently calculated that comparing an FHA loan at 5% on a specific house with a 6% loan on the same house, the buyer’s payment would be $191 more per month.But, if some Buyers can’t afford to go up $191 a month, they would need to settle for a home that would cost $24,500 less than they could have bought at 5%. That will keep some Buyers from buying a home that meets their needs; and it will keep some Sellers from being able to move up.10. All of this adds up to this conclusion: If you want to move up (or down if you are “downsizing”), you won’t get a better time than now.