Few Taking Advantage of Low Current Mortgage Rates, Home Prices
August 10, 2011According to a report from the National Association of Realtors (NAR), the housing market worsened during the typically active spring buying season, with average home prices falling another 2.8 percent in the three month period ending on June 30 as compared to the same period from the previous year.
Sales volume also took a hit during the second quarter of 2011, dropping 5.4 percent below the first quarter average and 12.7 percent under the second quarter average reported in 2010.
The drop in sales came despite ideal buying conditions with current mortgage rates near record lows and home prices more affordable than ever. According to NAR’s chief economist, Lawrence Yun, the organization’s Affordability Index — a computation based on property prices, family income and interest rates — came to its third highest score since it was developed, failing only behind the scores reported for the two previous quarters.
Analysts blame poor hiring rates for the decline in home values and buyer activity, and many predict more of the same for the foreseeable future. Glum forecasts have scared potential buyers away, and many fear declining values might wipe out the equity they create with their initial investment.
Still, mortgage expert, Mike Aubrey, host of HGTV’s Real Estate Intervention, says now is a fantastic time to buy for those who plan to reside in their properties for at least seven years. According to Aubrey, buyers aren’t likely to ever see times this good again, and those who look at their home as a long-term investment will ultimately outlast market troubles.
