Wondering if you are better off waiting until next year for buying a home?
Unlikely, when you look at the following 3 factors which threaten to erode housing affordability after the New Year…
- Rising Mortgage Rates
Mortgage interest rates seem to just keep on diving right now but it won’t last forever. Continued weakness in the economy and job markets as well as other factors are holding rates down for those buying a home right now but is a trend which is certainly anticipated to change after the November election and as we turn the corner into 2013. Even a modest rise could mean paying tens of thousands to hundreds of thousands of dollars more for the same home.
For the few afraid they won’t be able to brag about getting the absolute lowest rate to their friends if they buy now you can always contract to buy a home and ask your lender about the ability to float down in rate if they drop further before you close.
- Evaporation of Home Loan Programs
Despite the need for looser lending it is unfortunately pretty brutally clear that unless things change in a big way quickly we may soon have fewer lenders and lose some of the most flexible mortgage programs that are left.
Even those with stellar credit and 20% could find it more difficult to get a loan in 2013 unless defaults decline rapidly between now and November. Anyone with less than perfect credit will definitely get penalized, if they can even get a home loan at all.
- Rising Costs
In addition the Obama administration raising the fees and increasing down payment requirements for low income housing FHA loans, a number of other political and regulatory issues in the works also threaten to see the cost of borrowing rise in the next 6 to 12 months.
This is on top of the fact that many real estate markets are already seeing an increase in home prices for a double whammy hitting those who put off buying a home till next year with compounded factors which could push them off of the property ladder all together.
