Here in the Brevard County Florida area (Melbourne and Viera) home prices are really attractive. On top of that the lower (historically low) interest rates make the bargains even more enticing.
How long will interest rates stay low? Not forever that is sure. Joe Harris of Morgan Financial provides us with a good explanation of where we are and will be heading.
Thanks, Joe.
Let me make a statement, and I hope you truly digest what I am about to say: the interest rates on mortgages here in Brevard County, Florida are about 1/8% off of their lowest levels in history. That means that if you qualify for a mortgage, you could potentially get a better rate on your loan than just about anyone in history. With interest rates and home prices as low as they are, and with the first time homebuyer tax credit extended into 2010, people should be lining up to buy homes. However, these rates have only one way to go, and we are headed there soon.
One of the biggest factors in our low rates right now is not the Fed's decision to keep the overnight rate as low as it is, rather it is from their decision to continue to purchase mortgage backed securities in the many Billions of dollars per week. When this purchase program ends, the demand for Mortgage Backed Securities will be less, therefore the price will decrease, and the yield (or interest rate) will increase.
Another factor that is keeping rates low, has been the low threat of inflation. While inflation is not happening right now, there are many concerns of inflation coming once the economy starts to improve. We are already seeing signs of inflation as the Core CPI (Consumer Price Index) came in higher than expected, and a little higher than this time last year. It is inevitable that when you dump as much into the economy as we have, and when the cost of money is as low as it is that we will see inflation. In inflationary times, bonds are not as attractive because they become devalued.
So, with Inflation around the corner, and the Fed finishing their Mortgage Backed security purchasing program coming to an end in 2010, interest rates are going to increase. The increase in interest rates will affect buyer's purchasing power, as well as their cost of money. I have said it before, and I will say it again: Now is the time to buy! Rates are low, but rising; home prices are down, but will go up; sellers are generous, but they will be greedy. Please take advantage of this opportunity, before it goes away. If you are currently renting, talk to a professional to see if you can buy; if you know someone who is renting, encourage them to see if they can buy.
Gary L. Waters PLLC, Florida licensed real estate agent, Century 21 Baytree Realty, Rockledge, Florida serving Florida's Space Coast including the cities and communities of Melbourne, Viera, Rockledge, Suntree, Merritt Island, Cocoa Beach and the surrounding region.
Read my blogs Florida Homes for Sale, Moving to Brevard County, Florida, and Brevard County Florida Real Estate Information.
Gary, thanks for reblogging Joe's excellent post.
The time to buy is now, historically low rates, low home prices and $6,500 to $8,000 tax credit create a perfect opportunity storm.
Bill - Thanks. Yes the tax credit as well..Thanks. How could I have forgotten that as well.
Gary
Great information, and would agree there only one way for interest rates to go.
Good luck and success.
Lou Ludwig
Very good observation Gary; Those of us with a little history behind us can see the writing on the wall. As far as buying, these are "the good old days"
Hi Gary:
Which makes it such a great time to buy!!!
Buyers need to call you and BUY NOW!!!
The rates will start to climb before we know it...
Toula - Buyers do need to move now. Tanks.
Ken - You got it...makes that listing you have in or on Ettington if I remember correctly even more attractive!
Lou - Thanks.
Hi Gary! I have a buyer who wants to lease purchase but, can afford to go ahead and purchase--I've been explaining this to him for a couple of weeks now and hope that he 'gets it' soon! We WILL remember these as the 'good old days' as far as mortgage interest rates go!
Have a wonderful weekend...
Debe - Thanks. People do need to act, while the rates are so good.
Gary This is certainly an excellent time to buy, the interest rates certainly won't stay low for ever. Right now there is so much incentive.
Jennifer - Thanks. The reasons for buying certainly outnumber the negatives - as long as someone has a secure job they should make a move!