According to experts at the National Association of Realtors, the housing market isn't what's holding the U.S. back from long term economic recovery: it's job security. In a statement to reporters, NAR Chief Economist Lawrence Yun called the housing recovery "choppy," especially in the wake of many banks' temporary suspension of foreclosure proceedings.
Low mortgage rates drive home purchases
However, in light of the fact that we have the lowest mortgage rates since Freddie Mac started keeping records in 1971, confident buyers can find great bargains while helping the country get back on its feet again.
Despite reporting a ten percent gain in month-over-month existing home sales, Realtors admitted that consumers have a long way to go before attaining anything close to the overheated real estate market of the mid-2000s.
This is good news for house hunters, who can take advantage of prices that have dropped as much as 25 percent from their previous decade highs.
Foreclosures make headlines, but the Realtors' numbers indicate that only about a third of existing home sales originated with bank-owned housing stock. While high, that metric indicates that low mortgage rates have a lot more to do with today's home purchases than deep price cuts or federal tax incentives.
Buy or rent?
Some communities now report median mortgage payments dipping below their typical monthly rents.
Personal finance expert Suze Orman has often advised families to only consider buying a home if they can sustain a 40-45 percent monthly budget increase over their current rent. The extra money covers expenses like emergency repairs and property taxes not always factored in to renters' monthly budgets. However, many families with stable incomes may be able to consider home ownership for the first time, thanks to some of the historic deals offered by mortgage lenders.
Having cooled off after a surge of home sales at the expiration of the federal home buyers' credit, many experienced mortgage brokers now have the time to dig deeper for qualified purchasers.
Although some mortgage lenders have become more transparent about the deals available from their own portfolios, local real estate agents who have weathered the storm know how to locate the best neighborhood bargains for first time home buyers.
If your budget fits the profile to switch from renting to buying, free mortgage quotes from online lenders can help you set a target price range.