Ask a Realtor, and you will get a resounding, "YES!" Watch any news network and you will sink into the doom and gloom forecasting that will have you watching every penny you spend. While you should definitely learn to read your local real estate market, it is more important that you gain an even better understanding of your own finances and long term goals.
It is true that we are currently experiencing a buyer's market. There are a lot of deals to be had out there, with foreclosures flooding the market and homeowners desperate to unload some of their financial burdens. Prices have fallen, even dramatically in some areas. Merrill Lynch says that home prices will fall 15 percent this year, and possibly another 10 percent in 2009. And with 30 year fixed rates at record lows, why shouldn't everyone be buying?
It is not only about the economy's health but rather about your personal wealth. There is a new bottom line in the real estate market: if you have a sizable down payment and a good credit score, you might get a loan. The pendulum has swung. Lenders have written themselves into a tight spot, have lost billions of dollars, and are not willing to take the same risks they did just a few years ago. Once-upon-a-time it seemed like anyone with a pulse got a loan.
Today, you have to prove your worthiness. Lenders will be willing to invest in you if you are willing to invest in yourself. If prices continue to drop, perhaps this is time you should take to bulk up your credit score and bank account.
While you are taking this time to empower yourself, keep an eye on the market. It is much better to buy while there is a down-trend than to wait for values to begin to climb, as they inevitably will. Interest rates will creep up again. This is the time for you to be proactive in a timely fashion. The real winners will be those that prime themselves by preparing beforehand.
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