Debunking housing myths

The rumors are swirling right now about the housing market.  Is it strong?  Is it cooling?  Is it still a seller’s market or is it a buyer’s market?  What does any of this mean to you?  Let’s debunk a couple of myths.  First of all, the market is still hot.  It’s not as white hot as it was but as with anything great and boring full force ahead, that can’t be sustained for too long before it slows.  For the past decade or so we have been spoiled with a white hot market and we all got used to it so now that that freight train is tapping the breaks it’s creating these rumors we’re all hearing.  The truth is, the market is strong AND home prices are still appreciating in value.  The rate of appreciation is declining but….still appreciating.  It seems that the word decline is a trigger word so whenever anyone hears declining there’s pandemonium.  End of myth 1.  

With any thriving economic market you tend to see rising interest rates.  The economy is healthy which means, rates will continue to rise.  This reality isn’t necessarily a deterrent for most buyers.  For a couple of reasons.  One being that consumers feel confident in the fact that they will have jobs to pay for their mortgages.  Another is that there are more and more financing programs available for buyers that, while still protecting them and their ability to repay, allows them to attain financing when in prior years they may not have been able to do so.  Varying buyer profiles becoming more widely accepted, in addition to consumer confidence continues to boost our economy further.  This is paired with the fact that interest rates are still incredibly low historically.  There have only been 2 times in history where rates have held steady at or below 5% and one of those times is right now.  So although, once again we have grown accustom to the recent rates of well below 5%, the fact that our economy is strong enough to support higher rates is great news for us all.  

In short, it’s still a great time to invest in real estate.  You’re going to have to pay living expenses anyway.  Why not utilize that investment and make it work for you?  Gain equity through a purchase versus renting.  If you already own a home maybe cash out some equity to pay off debts, diversify your investments in other sources or achieve additional goals like sending kids off to college or traveling.  Sell your current home and move into something that fits the life that you have now versus the circumstances you had before.  It’s always a great idea to know your options and make sure that you’re maximizing what you spend your money on.  You work to live, not live to work and no one should be throwing money into something that doesn’t work for them.  

By: Nichole Jackson – Options Financial Residential Mortgage