If you\u2019re planning to buy a house right now, the next few months may be the best\u00a0time\u00a0to buy.\u00a0Waiting for both housing prices and\u00a0interest rates\u00a0to fall may not be a good strategy for potential homebuyers since analysts don\u2019t expect any significant declines in these two most important home-buying factors. Here\u2019s nine real estate trends that suggest you should get into the\u00a0housing market sooner than later.<\/p>\n
1. Lowest Housing Prices in Years 2. Interest Rates at a 50-Year Low 3. Interest Rates Expected to Go Up 4. Adjustable Rate Mortgages at Record Lows 5. Low Down Payment Mortgages Available 6. Easy to Qualify, Easy to Borrow 7. Lenders Offer No-Fee Mortgages 8. Home Builders Eager to Sell, Offer Incentives 9. Motivated Home Owners Desperate to Sell The Bottom Line
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\n<\/strong>Nobody knows when the housing market will hit bottom, but prices are at their lowest in several years and may soon start inching back up again. So buying now or in the near future may be the right time. An abundance of bargain-priced housing is now available because of foreclosures and falling prices.<\/p>\n
\n<\/strong>Interest rates are near a 50-year low, according to housing analysts.\u00a0By the second week of May, 2011, 30-year\u00a0fixed mortgage\u00a0rates had fallen to their lowest rates of the year at 4.63%.\u00a0Although\u00a0mortgage rates\u00a0vary from day to day, the 30-year rate at this level is an attractive inducement to first-time buyers, or buyers who want to either move up to larger residences, or others, including many empty-nesters wanting to sell and move to smaller houses or condos.<\/p>\n
\n<\/strong>As the economic recovery gains momentum, interest rates are expected to increase, making mortgages more expensive. Even a half-percent increase in mortgage interest can add a hundred dollars or more to your monthly payments, depending on the amount of your loan.<\/p>\n
\n<\/strong>Adjustable Rate Mortgages (ARMs)\u00a0are also lower now, although there are risks that interest rates may increase over the\u00a0life\u00a0of the mortgage and the balloon payment due at the end of the mortgage life, usually three or five years, could be substantial.\u00a0Nevertheless, for new buyers who are sure they\u2019ll have enough income to meet payment obligations, an ARM may be the best way to buy a house. Keep in mind that payments may increase on a monthly basis.\u00a0For a full explanation of advantages and risks in an ARM, visit the\u00a0federalreserve.gov.<\/a><\/p>\n
\n<\/strong>Low-down-payment financing through\u00a0Federal Housing Administration-insured mortgages is available as an additional inducement to buy a house now.\u00a0Down payment minimum requirements also fluctuate and may increase as the market heats up, so potential buyers with less\u00a0cash\u00a0to consummate a deal may be well-advised to buy now.\u00a0<\/cite><\/p>\n
\n<\/strong>Lending standards have become less rigid recently, so qualifying for a mortgage may be easier.\u00a0Experts advise that a potential buyer become pre-approved for a loan by a lending institution \u2013 meaning that a lender guarantees to make the loan contingent on an appraisal of the property.\u00a0But the good news in seeking pre-approval is that lenders are now willing to let a potential buyer take on more debt than the previous formula allowed \u2013 a percentage of monthly income. (For more on getting a\u00a0cost effective\u00a0mortgage, see\u00a0Score A Cheap Mortgage<\/em>.)<\/p>\n
\n<\/strong>Many banks and other lending institutions are waiving mortgage loan generation and other fees and points (each point represents 1% of the loan amount), thereby reducing the cost of buying.<\/p>\n
\n<\/strong>Home builders, competing with the resale market, are offering incentives to potential buyers to reduce their inventory of unsold new homes.\u00a0Incentives may include cash for furniture or free refrigerators, washers and dryers. In Seattle, for example, builders have offered opportunities to win\u00a0iPads\u00a0or Smart phones, and $3,000 buyer bonuses.\u00a0Specific demographic groups, including military personnel, police, firefighters and health-care workers, have been targeted by builders for special offers.\u00a0But virtually anyone who can qualify for a mortgage is likely to get a good deal from a homebuilder\u00a0who is\u00a0eager to sell.\u00a0\u00a0<\/strong><\/p>\n
\n<\/strong>Desperate sellers of existing homes have also been offering attractive inducements to potential home buyers, including warranties on appliances, air conditioners and furnaces. Some sellers are even offering cash or have included furnishings, refrigerators, washers and dryers as a bonus to potential buyers.\u00a0With so many existing homes in foreclosure or\u00a0underwater\u00a0\u2013 bargain prices are abound in this depressed market.\u00a0(For help on buying a house, read\u00a0Top Tips For First-Time Home Buyers<\/em>.)<\/p>\n
\n<\/strong>With a\u00a0convergence\u00a0of the factors above, all of which are favorable to the prospective home buyer, there may not be a better time to buy than right now.\u00a0It\u2019s a buyer\u2019s market, but like everything else in life, the bargain deals won\u2019t last.<\/p>\n