Buy now or Wait? Part Two

January 21, 2009
Matt Isleib

 

On December 5th of 2008 I wrote a blog on this very subject. I said if you are looking to buy it was a great time. Fixed rates then had just cracked 6 percent. Home values were getting cheap and there were some great buys popping up. Let’s fast forward about 45 days to today. Rates are unbelievable! In fact they are the lowest the have been in over 50 years. Interest rates poked through 5 percent. Rates in my opinion look to hang around here for a while or continue to go lower. There are several reasons we are seeing mortgage rates plummeting. For one the Fed has been a huge buyer of 10 year treasury notes pushing the yield close to 2%. It is also in their best interest to keep rates at these levels for as long as possible to help stimulate an absolutely dead housing market. Secondly there is still weakness in the MBS (mortgage backed security) market. The combination of the two and the Fed wanting low rates to help in jump starting the economy has brought us to where we are today.

 

If you are a buyer now there are some absolutely silly home prices out there right now. You just need to look. I have seen and heard of some staggering discounts on property. Homes that had sold for $3 million and now are being sold via a short sale for $1 million, Property that had sold in the $300k range are now selling in the $175-190k range.

 

If you have the patience you will be rewarded in this market. There are just getting to be too many good opportunities out there. And to boot with rates being this low it makes it all the better.

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