10 Reasons to Buy a Home

Why is now a great time to buy?

 Here are 10 reasons:

1. You can get a good deal. Prices are down 30 percent on average. They’re at a level that makes sense for people’s income.

2. Mortgages are cheap. At 4.3 percent on average for a 30-year fixed-rate mortgage, your costs to own are down by a fifth from two years ago.

3. You can save on taxes. When you add up the deductions for mortgage interest and others, the cost of owning can drop below renting for a comparable place.

4. It’ll be yours. The one benefit to owning that never changes is that you can paint your walls orange if you want (generally speaking; there might be some community restrictions). How many landlords will let you do that?

5. You can get a better home. In some markets, it’s simply the case that the nicest places are for-sale homes and condos.

6. It offers some inflation protection. Historically, appreciation over time outpaces inflation.

7. It’s risk capital. If the economy picks up, you stand to benefit from that, even if you’re goal is just to have a nice place to live.

8. It’s forced savings. A part of your payment each month goes to equity.

9. There is a lot to choose from. There are some 4 million homes available today, about a year’s supply. Now’s the time to find something you like and get it.

10. Sooner or later the market will clear. The U.S. is expected to grow by another 100 million people in 40 years. They have to live somewhere. Demand will eventually outpace supply.

Source: Wall Street Journal, Brett Arends (9/16/10)

1535 9th Avenue, Olivehurst

Quiet street near Yuba County Airport. Off of Arboga Road. Nice fenced Yard Front and Back. Covered Patio. Come and See for YOURSELF, It is HOME!

The Good News About Rising Mortgage Rates

Rising mortgage rates may seem like the last thing the economy needs right now. Then again, they may prove a tonic.

One indication of whether that may be the case will be the coming weekly tallies of mortgage-application activity from the Mortgage Bankers Association. While Wednesday’s release might not yet reflect the sudden, recent turn in bond yields, the data could soon show if the prospect of higher mortgage rates spurs consumers to buy homes.

So far, home buyers haven’t been that tempted by an average 30-year, fixed mortgage rate that hit 4.32% as of Thursday, according to Freddie Mac. Most of the action has been among existing homeowners looking to refinance their mortgages.

One reason buyers have possibly remained hesitant is that there is little reason to act if rates may fall even further, a classic deflationary mind-set.

That psychology may change. Bond yields have perked up after some mildly encouraging U.S. economic reports, notably Friday’s report that private-sector hiring continued its eighth consecutive month of gains in August. In response, prices for the benchmark 10-year Treasury note fell for a second straight week as investors regained a stomach for riskier assets. That sent the note’s yield, which moves inversely to its price, to about 2.7% on Friday from about 2.45% just days before.

That is a big move by Treasury-market standards. And its impact will be felt almost immediately in mortgage rates, which tend to move in lock-step. Mortgage rates have tumbled in recent months as fears of a “double-dip” recession have pushed Treasury yields down sharply.

An increase in mortgage rates now may worry Federal Reserve policy makers, who are trying to push rates lower in an effort to stimulate economic and housing activity. Some Fed watchers, including IHS Global Insight economist Brian Bethune, expect Fed policy makers will unveil more policy-easing measures at their next meeting on Sept. 21, since their target lending rate is already near zero. “They can’t afford to take the risk that home prices start to fall again,” says Mr. Bethune.

But the Fed is unlikely to be so hasty. And if the possibility of higher rates starts pushing more people to buy homes, that risk may be something the Fed can live with.

From Wall Street Journal