Has Your Real Estate Ship Come In, Again?

The national real estate news is all about the interest rates.  The Federal Reserve is purchasing less mortgage backed securities which should have bounced the rates up.

But to the contrary, the rates are around 4%.  To that point, the home sales are down as well.  So there may be a strategy with the lower rates to increase home sales.

Is it time to buy a home?  Check out these considerations. 

• Low home prices
• Low interest rates
• Future appreciation because prices are expected to increase about 4.3% in 2015
• The supply of homes has increased 
• Las Vegas home prices are below national median
• A mortgage is cheaper than rent

Las Vegas Market Statistics

Las Vegas had 3,888 recorded resales in June.  The sales for the first six months amounted to 18,375.  That is a year to year decrease of 17%.  Fannie Mae is projecting that there will be a rebound through the rest of 2014 and continuing through 2015 with a 5.3% increase in sales.

Our median price of a single family home was $165,000.   That is a year to year increase of 3%.  The national median price is $208,000.  With the 4.3% forecasted for 2015 the median will increase to $218,000.

More Home With Low Rates

You can purchase “more home” with low rates.  According to John Moony, managing vice president of Guaranteed Rate, a national mortgage company based in Chicago, a 1% increase in the interest rate equates to a 10% reduction in your purchase power.  That means that if you want your mortgage payment below $1,500 for example, you can buy a home for $300,000 at today’s rate.  If you wait until the rate goes up 1%, your price goes down to $270,000.  See the example below.

The Buying Power Of "NOW"

Example of payment difference:    $300,000 at 4%  equals a payment of $1432 principal and interest.  $300,000 at 5% equals a payment of $1610 principal and interest.  The price would have to be reduced to $270,000 at 5% to have the payment of $1,449.

This indicates that today is the time to buy!

Check out my mortgage calculator at http://tatyanacaruso.com/mortgage-calculator/ .

Information Sources:  Dennis Smith of Home Builders Research, Neil Cavuto of FOXBusiness, John Moony of Guaranteed Rate, and Teke Wiggin and Lawrence Yun of the National Association of Realtors.