Have we reached the bottom? There are some positive indicators but are they enough to get folks in the buying mood and will money be any easier to get? The following was taken from an article by Lawrence Yun, National Association of Realtors Chief Economist. You can read the full article, Good Signs for the New Year by following this link http://www.realtor.org/research/reinsights/economistcommentary?cid=WR12212011:37509&ed_rid=2598311
Mr. Yun makes four good points and illustrates how rising costs in the future compare to a mortgage secured today.
First, existing home inventory has been trending downward consistently.
Second, rents are rising and rent increases accelerating.
Third, jobs are being added to the economy.
Fourth, mortgage rates are too low to pass up.
He goes on to ask and adds – What will happen over the next 30 years? If the cost of some of the above consumer items rises at a similar pace as in the past 30 years, then gasoline prices will run around $9 per gallon while the $20,000 college tuition of today will reach $140,000 per year. But one item which the consumer will not pay a nickel more is on their monthly mortgage payment. At the current median home price and current mortgage rate, the monthly mortgage payment would be fixed at $698 per month for the next 30 years. At the same time, home values likely will have tripled.
http://www.realtor.org/research/reinsights/economistcommentary?cid=WR12212011:37509&ed_rid=2598311
Paul Cruz
