Lower Interest Rates…Again! Is it Time to Buy Yet?

There’s no doubt about it, money got cheaper since yesterday’s decision to raise the debt ceiling. In fact, according to CNN Money in its news article titled Mortgage Rates Plung, Flirting with New Lows, 30-year fixed rates are back down to 4.45% and the 15-year to 3.52%.

So the big question for us North OC home-seekers is: Is it time to buy a home in Anaheim Hills yet? Depending on who’s asking, my opinion on the above question varies significantly:

You are a speculator looking to turn a quick buck. Don’t even think about it. Interest rates will go up soon and home prices will fall significantly here in North Orange County and the average time on the market for home is not a few days like in the boom times.

Are you and investor seeking tax shelter. Ask your accountant to advise you on just how much money you are giving away to the government. Multiply that number by the number of years that it will take to recoup 6% to 10% of the purchase price you are considering and there’s your answer. If “X” amount of years is acceptable, then you can rest assured that it is, in fact, time to buy.

You’re a first-time buyer who has little or no down payment and have no tax shelter needs. Then stick-it-out brother and save some money for a down-payment while your sticking. By May of 2012 we will have a better picture as to just how much downward movement is possible in residential home pricing!