Now’s the Time to Buy a Home
Prices are near bottom, rates are cheap and there are plenty of houses to choose from.
By Pat Mertz Esswein, Associate Editor ~ Kiplinger
This spring, opportunity is knocking hard for home buyers. Aside from the soon-to-expire tax credit worth as much as $8,000 (you must have a contract by April 30 and close the deal by June 30), affordability has returned to pre-boom levels and mortgage money is cheap, with the 30-year fixed rate hovering around 5%.
Before you leap, you’ll have to weigh the risk of further price declines in your market. The median price for single-family homes is $163,600, according to the National Association of Realtors — about what it was in 2002. Fiserv Lending Solutions, a research company in Cambridge, Mass., forecasts that it will fall another 6.4% in 2010. But the price trend varies a lot by city. For example, prices in Washington, D.C., could fall another 12%, while prices are predicted to rise 1% in Pittsburgh, Pa. The biggest predictors of further price declines in most markets are joblessness and distressed sales. More foreclosures and short sales (properties sold with the lender’s okay for less than what’s owed on the mortgage) are coming, but they’ll ease their way onto the market instead of hitting it like a bomb.
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