Recent mortgage rate spikes and retractions created inspiration
I've noticed more buyers are in the market, not just in my personal local experience, but nationally. In what I see as an initial panic over sharp mortgage rate increases and an opportunity to regain some lost ground as the increase retracts a little, the fence is clearly no longer the place to be if you are considering home ownership. While I will echo the sentiment of one of my previous blogs from July (when we first saw mortgage rates increase), DON'T PANIC, I will say buyers have been given a reprieve thanks to the relatively "soft" presentation of Fed Chairman Ben Bernanke on Wednesday, July 17th. The assurance that the Fed won't be tapering off too much on the purchase of mortgage backed securities, differing slightly from what he hinted at earlier this quarter, created a welcome ans slightly calming effect on mortgage rates and thus preserving some of the buying power of those looking to buy a home. Over two months after the initial rate spike we saw at the end of June and on July 5th in particular, has nonetheless added some real urgency and knocked real estate spectators off the fence and into the game.
So you want to buy a home before rates go up further, now what?
I'll say it a different way: don't be overly anxious just because you know your buying power has been hindered a little and is showing signs of future vulnerability. The reason why people go to a real estate professional is to mitigate the anxiety (among many other reasons) over all the moving parts involved in looking for and finding a home and there is no point in trying to babysit every nuance in the mortgage or real estate markets; fearing potential outcomes. First order of business is get a good 'ally' in your camp who meshes well with your personality and speaks your language. Not only is home buying a huge financial commitment, it is a huge emotional commitment and you will want to work with someone who you can relate to, pure and simple. A good real estate agent has not only the skill, knowledge, ethics and experience with all the mechanics of the transaction, they will help you cope with the added stress.
But wait, there's more... much more
I spoke in my last blog about the obvious concerns when buying a foreclosure property, but recognize that no house is ever perfect; you will need to prioritize and follow those priorities as they will be your subjective decision making guide. Many buyers, including some of the ones I know personally who have recently been 'scared' off of the fence and are now contacting me, have a tendency to get caught up in the general characteristics of a home such as bed and bath count, square footage, lot size, etc. While these may be important indicators for initial consideration as to whether or not a home meets your basic needs, do not forget equally crucial elements such as amenities, noise level and other factors which impact your long term enjoyment of the home. Especially for first time buyers, factor in maintenance costs for after the home is officially yours (and your responsibility alone). Even new homes will need some upkeep and care, sooner than you might think. Some buyer's remorse is very understandable, even for people who have purchased before, so do your best to remember no home, like the humans who occupy them, is perfect.
Long term considerations about appreciation are fine, but a home purchase should be first and foremost about a warm and safe place to lay your head at night.
Sylvia Harsin
714-612-5373
Sylvia@sylviaharsin.com
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