Unless you’ve been living under a rock, or just totally ignoring news for the last couple of years (which isn’t such a bad idea, by the way), you know that mortgage interest rates are at record lows. And while you might not know it, home affordability, or the monthly payments of homes compared to incomes, is at record or near record levels.
Therefore, there are two things that seem to be holding people back from buying a home at this point – fundamentals and expectations.
By fundamentals, we mean things like income and credit issues. This has been a bad recession, and as a result, some people just don’t have the income to make the investment in a home right now. Some people have seen their credit rating suffer as a result of a job loss or change in income, and with the higher credit standards that the banks are using these days (which aren’t really different than they were 10 years ago but are significantly different than they were during the bubble) some people simply can’t buy right now. And that’s completely understandable.
By expectations, we mean someone’s reluctance to purchase now because of the expectation that prices will go down even farther than they have already. And this is the factor that may change the most this Spring. Due to decreased inventory of homes on the market, other than investor-grade homes, median and average prices may increase this year for the first time in a while, and median and average prices already seem to have stabilized.
As a result, those waiting based on expectations may find themselves paying more for a home than they would if they started the process now.
For more information on purchasing your first home, visit our website at www.springfieldfirsthome.com, or call or text 417.872.9222.
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