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Is It a Good Time To Buy a House?

This week we explore mortgage financing and interest rates.

No crystal ball can tell the future of interest rates in the United States, specifically home mortgage interest rates. Some experts make compelling arguments that interest rates are on the cusp of rocketing upward; others believe they will remain historically low for the foreseeable future.

“Predicting the direction of interest rates from one day to the next is an impossible task. There are too many variables in the world today that have an impact on how Wall Street traders view the marketplace," said Jim McKenna, of Atlantic Home Loans Inc.

"From the sovereign debt crisis in Europe, to the natural disasters in Japan, to the political unrest spreading across North Africa and the Middle East, it’s impossible to predict how these events might impact our economy, and therefore impact mortgage interest rates. Mortgages are, after all, government backed bonds.  These bonds lose value in the face of rising inflation.”

Phil DeMuth, an investment advisor, and author of “The Little Book of Alternative Investments,” says now is a great time to buy a house.

“Housing prices are where they were back in 2002 and you’ve got mortgage rates at five percent now on a 30-year mortgage," he said. "If you can put the 20 percent down and qualify for a good mortgage, this is an excellent time to buy a house. It’s tough to forecast interest rates, but I see the current situation as a win-win for the potential home buyer.” 

According to the analysts of Moody’s Analytics, “houses are more affordable now than they have been in decades, and in some areas, prices are listed below the valuation level prior to the housing bubble which peaked in early 2007.”

With the spring market in full bloom, this is a great time to sell or buy a house.

Jim McKenna can be reached at 973-271-2240 or via email at jmckenna@atlantichomeloans.com.

Ed April 11, 2011 at 01:32 AM
Never heard a realtor say it was a bad time to buy a house. I think this is what drove the market up to create a bubble. Realtors always told buyers "great time to buy" and "we can get you financed" It was the realtor who lead the buyers to financiers who would give them a mortgages with zero down and undocumented finances. Remember a realtor gets a $60,0000 check every time they sell a one million dollar home. For the last 2 years realtor's pitch was "interest will be going up soon". Most real estate economist (people who do do not collect $60,000 on a sale) believe there is an over supply of houses it will take 10 to 20 years to recover. And with congress talking about lowering the deduction for mortgage interest. And please don't forget the easiest way for towns to create money is raising property tax. Yes, If you can afford to buy, want the freedom and independence of owning a house, then yes, buy a house. Don't count on home ownership vs. renting for financial gains this generation sorry......
karlbills April 11, 2011 at 06:18 AM
I just refinanced using "Mortgage Refinance 123" and went from a 5.5/20yr to a 3.25/15yr. Monthly payments went down by about $100 but overall savings over the life of the loan are over $60,000. Definitely worth it in my opinion. Learn more about refi before you do one.
Carl April 12, 2011 at 07:06 PM
$60,000 huh?!? More like $25,000 commission on a $1,000,000 sale. Still not bad though!
suzanne April 14, 2011 at 02:24 PM
$60,000 on a $1,000,000 sale??? You obviously were never a real estate agent. This is not even close to what an agent will get. For all the deals and clients who change their minds or have you searching for them for three years, the commission an agent gets at the closing table is well earned. It's too bad people think that all agents are just trying to look out for themselves. This is not the case among all the agents I have met while working in the Chathams. This is a hard job---stressful. These folks deserve your loyalty. Remember, this is a job, not a volunteer stint. I am sure we all want to get a pay check for our work. Suzanne
Duncan Munchkin May 05, 2011 at 09:21 PM
Suzanne...I feel for you. It must be difficult to constantly have to bite your lip while you convince some unsuspecting out of towner that a 3 bedroom cape is really worth $799K, or that North Passaic isn't really that noisy--"you'll get used to it." I'll try to get everyone in this town who was sold bloated real estate and is underwater now to pitch in and buy you guys and gals a fruit basket. Thankfully, the next leg down is coming.
Sir May 06, 2011 at 02:39 PM
Sounds like duncan fell hook, line and sinker and overpaid. Oh well. Realtors show houses, adults make decisions as whether they are a good investment or not.

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