Quiet Rumors are Right: Now Is the Best Time to Buy a Home
May 18, 2012 Leave a comment
Remember in the mid 2000’s when many people said it was the best time to buy a home? No matter where you turned, all you heard was “buy now!” We’re sorry to say that at that point, it was too late. When news comes that strong from all sources, it is already old news. The secret is to get in BEFORE everyone knows it’s the right time. As they say in investment trading, “buy on rumors, and sell on news.” (See this post from About.com explaining
the investing concept)
Rumors are beginning to circulate that the economy and housing market are improving. These rumors are quiet, but they’re true! Because the best time to invest is when markets are still in the early stage, we believe NOW is the best time to buy a home. See below for some key signs we’re seeing that confirm the rumors and explain why we encourage people to buy asap.
The Affordability Index is high.
According to the National Association of Realtors (NAR), the Housing Affordability Index measures whether or not a typical family could qualify for a mortgage loan on a typical home. An index of 100 means that a median income family can afford to buy a median priced home.
In 2010 the index hit 174 which meant that a median income family had 74 percent MORE income than was necessary to buy a median priced home. But now, with today’s lower home prices and record low mortgage rates, the Index has reached an all-time high of more than 200 in some areas of the country!
Home Sales are increasing.
According to The Niche Report, the Home Sales indicator is another important number to watch. During the housing bubble of 2005, the sales index hit 7 million homes sold per year. Compare that to 2010, which reached only 4.19 million, many of which were distressed properties. However, 2011 saw an increase, moving up to 4.26 million and 2012 is forecasted to reach 4.93 million sales – a healthy number that may help increase home prices.
Mortgage Rates are at all-time lows.
At BluFi, our rates are always the lowest around, but even in general – mortgage rates are still at record lows. On average, rates are in the high 3% range on a 30 year fixed!
Cash Investors are moving.
All-cash investors are quickly moving on properties. NAR reports that all-cash sales were 32% last month. These are expert, multi-millionaire investors who are buying with cash because they know it’s a good deal. When we see 32% of sales coming from experts, we know it’s the right time to buy.
Building Permits are up.
Recent updates from Mortgage News Daily show building permits are now at one of the highest levels in years. While this doesn’t necessarily mean they’re building tomorrow, it is a signal that they want those permits and are ready to move on the rumors!
Rent prices are up.
A rent bubble is starting to appear. As many homeowners lost their homes and had to return to renting, the rent price skyrocketed. Now, with mortgage rates at all-time lows, and rent prices increasing, in some cases, mortgages prices are lower than rent prices! When it’s cheaper to own than it is to rent, you know it’s time to buy.
The bottom line: The housing decline is over.
The rumors are quietly growing, and the facts are appearing to back them up. Now is the best time to buy a home. The experts have already jumped on the wagon, but at BluFi – we want YOU to get in at the right time too. We serve average American consumers, not millionaire investors, so we’re doing everything we can to help people who are thinking about buying a home. You’ll see in a previous post that we’ve ramped up staff to maintain our standard of closing loans quickly.
If you’re ready to take advantage of all of these great rates and great opportunities, give us a call at 1-800-644-7779 or visit us online at www.BluFi.com.
