Buying - 44% Cheaper than Renting According to Study

Trulia study shows that buying a home is in the average of 44% cheaper as suppose to renting in the 100 largest Metros in the US.    In 2012, buying a home was 46% cheaper than renting.   According to Freddie Mac, from February of 2012 to February 2013, the 30-year fixed rate dropped from 3.9% to 3.5% though rates have been increasing in March. 

Mortgage rates are still at historic lows.  Purchasing your own home would be 44% cheaper than renting at 3.5% mortgage, while buying at 4.5% mortgage rate will only be 39% cheaper than renting and only 33% cheaper at 5.5%. Low mortgage rates are helping to keep buying more affordable for home buyers.  Higher interest rates mean a higher cost of owning.  Experts believe that mortgage rates are NOW at its lowest.  So if you're thinking of buying your new home - NOW is the best time to move!

 Buyers are willing to buy. But where are homes for sale?  Potential sellers are eyeing the home prices   very carefully.  They're playing the waiting game. They want to see how high can a home appreciate before they consider selling their home. But  some experts say that they are missing out on huge sale opportunity by doing so.

Daren Blomquist, Vice President of Realty Trac says that home owners that bought their home 2-3 years ago may find that in  2013 is the perfect time to sell.  

"If you're selling one house just to move up to another, it does you no good to wait for prices to rise - the price of the move-up home will increase faster than the price of the place you're leaving behind." says Redfin CEO Glenn Kelman.  In addition to that, Mortgage Bankers Association predicted that mortgage rates are expected to increase from 3.5% range to 4.5% in the next year.  This means that the increase in mortgage rate will increase the costs of financing for your next home. 

Both scenarios indicate that NOW is the best time to buy or sell your home - before it gets too expensive.  So, my advice is to move in the market now, before prices go up.  If you're planning to buy or sell your home, I can help.  Just give me a call or visit my website at www.jamesteamrealestate.com

Current Housing Turning Into Seller's Market

Total existing home sales (including single-family, condos and co-ops)  in the month of December increased by 12.8% at 4.94 million this year compared to last year's 4.38 million-unit level.  See data below:

         Source: National Association of Realtors

According to NAR chief economist, Lawrence Yun said, "Record low mortgage interest rates clearly are helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales." he said.  "The number of potential buyers who stayed on the sidelines accumulated during the recession, but they started entering the market early last year as their financial ability and confidence steadily grew, along with home prices.  Likely job creation and household formation will continue to fuel that growth. Both sales and prices will again be higher in 2013."

The total housing inventory at the end of December fell 8.5% to 1.82 million existing homes available for sale.  Although the limited inventory, overall sales are still expected to increase.  The biggest effect of limited inventory is that the home prices tend to increase.  However, considering all the factors, home ownership is still affordable.

The inventory is expected to have a seasonal rise in spring.  But clearly, a seller's market may be developing.

MORTGAGE RATES

Although the current mortgage interest rates are at historically low with rates slightly above 3.5% for 30-year fixed rate.  It is expected to increase as the year progresses but it should remain under 4%.

For Alaska current mortgage interest rates, refer to http://www.ahfc.us/buy/resources/current-rates/.

The housing is showing plenty signs to recovery - from increase in existing home home sales to decrease in mortgage interest rates.  According to Jed Kolko, Trulia chief economist, housing market will return to "normal" in 2-3 years time as long as the market shows the same improvement.  For questions on housing, please don't hesitate to contact me or you can visit my website - http://www.jamesteamrealestate.com.