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It is time to buy

Is it time to buy? Yes 

The two main reasons you need to buy now:

1. Interest rates will rise

2. House prices will rise

So you’re sitting on the fence thinking about whether or not it’s time to buy a home. I can’t blame you if it’s a tough decision. Market timing, whether discussing stocks were really say, is important. The challenge of finding the best time to enter the market is incredibly difficult. To know when to enter, one must understand where we are on the cycle of expansion and contraction. My crystal ball tells me we are slightly past the bottom – a perfect time to get on-board. 

Every Econ 101 class teaches that there is a direct relationship between interest rates and inflation. As the market begins to heat up, interest rates will rise.

Soon we will begin to feel broad price pressure. The creep of inflation, aided by intentional governmental policy to spur growth, will take hold. 

The inflationary effects that emanate from an improving economy will drive up interest rates and will drive up the cost of purchasing a home. Consider the cost of purchasing a $200,000 home at an interest rate of 4% ($995/mo) versus an interest-rate a 6.5 % ($1264/mo) – also a historically low rate but much more line with what we expect in the near term. In this example, the difference between these two rates accounts for the difference of about $270 a month. For the average family, that is “real money”.

Owning a home still carries with it some of the traditional advantages, including tax savings. You have the pride of home ownership. You build equity with each payment. You have the choice to change things if there’s something you want to change in your home (as opposed to the restrictions that you have with rental property). There is a solid probability that you’ll have some inflation protection with your investment as real estate tends to outstrip the pace of inflation. When home prices begin to move north, as they will eventually do, you will be in a position to enjoy the increase in property values.

One thing you can count on is that sooner or later, we will return to normal interest rates. What is "normal"? For the US mortgage market that is about 8%. I will venture to say that few homeowners today are sensitive to the impact that an 8% rate might have. We have a rising population with pent-up housing demand waiting in the wings. Tens of thousands of people, who want to purchase homes, have refrained from purchasing. As they understand the improving market, and interest rates tick up, their resolve to wait will become an urgency to purchase.

If you are on the fence about buying, now is a good time to make your move.

Call me if I can help.




First-time buyers guide

Military buyer

About to make an offer? Read this first.

Making an offer

Location selection

Mortgage facts


Earnest money



Home warranty

New construction

Better to own than rent?

Contract to closing - the critical period

HOA associations

Home loan toolkit

Utilities information

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