With the recession buying a home may be the last thing on your mind.  But if you’re on a lease that will be up soon, or if you’ve been planning to change your location, now might be a good time.

Everyone is Scared
Investor and philanthropist Warren Buffet once said “Be greedy when people are fearful and fearful when people are greedy.”  While perhaps greed is not what we are looking for here, it is something to think about.

Since the economy isn’t doing well, people are scared.  We saw this over the holidays with ridiculous blowout sales and stores closing left and right.  The American consumer is frightened of investing in anything because they want to save their money.  They see their peers losing their houses and jobs all around them, so it is logical to be a little wary.

However, if you know you have a steady job and have some money saved up, now may be a good time to invest in property.  It is cheaper than it was a couple years ago, and cheaper than it will be in a couple years from now.

Low Interest Rates
Mortgage interest rates plummeted this autumn, falling from 6.06% to 5.77% in a matter of two days at one point, and until the economy improves, interest rates will stay low.  In fact, the average mortgage interest rate fell below 5% just last week.  Because of this, people are saving hundreds of dollars a month, and any Google search on this will bring up results regarding refinancing.  But interest rates can’t plummet forever, and once the economy improves, they will go up.

Foreclosures
Foreclosure rates increased about 70% from 2007 to 2008, and sales of previously occupied homes went up 2.9% as early as February of last year.  Foreclosures make it cheaper to buy the property up again.  They in part cause real estate agents to give lower prices on homes.  The average price of a house has dropped about 13%, the largest price decline since home sale records began.

Chances are you don’t own a home yet if you are just starting a career or finishing school.  If you are a student or recent graduate living in a city or an area that has a high foreclosure rate (like Florida or California), now is a good time to look into the housing market.  If you have some money saved and know a good real estate agent, think about investing in some property; you will almost definitely be able to sell it back for more later, the only question is how much more, especially as the economy improves and people start wanting to buy houses again.  Get it while it’s cheap!

Have questions about getting a mortgage? Check out our Mortgage Resource page.