any first-time home nature, housing prices seldom go
shoppers have been down for very long, and there
discouraged by the high have been extended periods in
prices in the housing market, and which home prices did not retreat
many people wonder if putting the at all. Saving even significant
purchase off a few years would be amounts of money may not be
a smart strategy. Many people are enough to cover the appreciation
waiting for a drop in housing of home prices, even if that
prices, but the chances of a appreciation slows down from its
significant drop in home prices current high rate.
is actually quite remote.
The best strategy may be to
While there are certainly pockets simply bite the bullet now and
of the country where real estate buy a home whose payments you can
can be said to be overvalued, in afford. This will allow you to
most areas of the country the participate in, and benefit from,
average house is actually priced any future appreciation in home
quite fairly. That means that prices.
putting off the purchase of a
home may simply mean throwing Let's look at an example - using
away more money in rent, and a home valued at $300,000 in
losing out on the significant tax today's market. In many areas of
benefits homeownership can bring. the country this would be the
average home. If that home
Many people plan to save their appreciated at a 5% rate over the
money waiting for home prices to next year, its value would rise
come down to a lower level, but by $15,000. Few potential home
this is generally not a winning buyers would be able to sock away
strategy. While it is true that enough in a savings account to
the housing market is cyclical in offset that much of a gain. And
that $15,000 figure does not housing markets out there, it is
include any potential tax savings important to remember that real
the buyer could have gained estate is not the same as the
through deducting mortgage stock market. There is a real
interest. intrinsic value to real estate,
and a limited supply. That means
Many potential home buyers have that even if home values fall,
thought that rising interest they are unlikely to fall as
rates would serve to cool off the significantly as stocks did in
hot housing market, but so far the last bear market. In order to
that has not happened. Even as trigger a significant decline in
short term interest rates have housing prices, there would need
continued to rise, mortgage to be a significant negative
interest rates remain near their event, and at the time no such
all time lows. In addition, event seems to be on the horizon.
waiting for high interest rates
to kill the housing market and There are plenty of anecdotal
lower prices will also mean that evidences that the housing market
you will have to take out a remains strong, and that it is
mortgage at a higher interest likely to remain quite strong for
rate, and that alone could negate some time to come. Even though
any savings you achieve through a many people think that the market
lower purchase price. for real estate may have peaked,
there remain plenty of stories of
While it is true that there have homes that sold for more than
been several instances of boom their asking price, and bidding
and bust real estate markets, wars continue to break out at
this situation is not in place in many open houses around the
most areas of the country. While country.
there certainly are overheated
In addition, there is little With all these indications of a
evidence to indicate that the still strong housing market, and
prices of homes are likely to still low interest rates on
suffer a decline in the near mortgage loans, it is easy to see
future, and the number of homes why waiting to buy a home may not
that sell for less than their be the best strategy.
asking price is still very small.
About the Author:
Andrew is the web owner of "Buy and Sell House Fast Guide". You can learn the 5 steps to protect yourself from a housing bubbles by visiting his website at: http://www.buy-and-sell-house-fast.com/
Read more articles by:
Andrew Loh
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