Time Magazine says, "Ignore the headlines." Now might be the time to buy...
In a recent article released by time magazine, Chief economist Jim Svinth (Lending Tree) was quoted as saying:
"The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher."
This statement makes a lot of sense when you take into consideration the slashing of interest rates that has recently occured to try and spur the economy back into an upswing. In otherwords, who is going to pay for the interest cuts? The money will have to come from somewhere and historically low interest rates have been followed by seasonably high interest rates which help to make up for losses sustained during that period.
Timing the market may not necessarily be the smart thing to do right now. Perhaps that time has already come. Consider this:
"Consider a typical home that sells for $218,900. You put down 20% and get a 30-year fixed-rate mortgage at today's rate of 5.5%. Monthly principal and interest come to $994.31. Let's say that 12 months from now the same house goes for 10% less, or $197,010. But by then the recession is history and the Fed is jacking up rates to stem inflation. If mortgage costs rise a point, to 6.5%, your monthly payment would be $994.94 and you'd have saved nothing. Meanwhile, home prices might steady and sellers might become less willing to negotiate. And you have spent a year living someplace you'd rather not be" (direct quote, Time Magazine).
If you are looking to get into a home right now, you should be looking long term. And by long term I mean at least 5 years out. Buying at the right price now can set you up for long term profits.