Wild stock-market swings, slumping sales and prices and renewed concerns about the stability of the U.S. economy are giving more homebuyers the jitters.
In recent weeks, applications for mortgage purchases dropped to the lowest level seen since December 1996, according to the Mortgage Bankers Association. Is it time to hit pause on your search? Or, with rock-bottom interest rates and values pushed back to last decade’s levels, will a purchase now have you patting yourself on the back in a few years?
We’ll ask the experts what they think about the economy’s sour state and its effect on the housing market. We’ll also review the latest housing stats and consider the merits of a home warranty.
Is there a case for cold feet?
The dire headlines of the past month have pushed consumer confidence to some of the lowest levels since the recession. But what does all this volatility in the stock market and economy mean for buyers, outside of low morale? That depends on how long it lasts, experts say.
If these economic woes continue with no improvement for months, that could push home prices down lower than predicted, says Stan Humphries, Zillow.com’s chief economist.
“The longer it drags on, the more impact (this turmoil) will have on the housing market,” Humphries says.
However, if employment continues to solidify and the market continues its slow but shaky recovery, the U.S. housing market could hit bottom by the end of next year and start slowly inching up again in 2013, says Ingo Winzer, president of forecasting firm Local Market Monitor.
Some markets in Texas, Southern California and parts of the Midwest could emerge more quickly. The U.S. debt downgrade, however, could further slow the recovery in markets with a high number of public-sector jobs, such as Sacramento, Calif., and Austin, Texas, Winzer says.
“Overall, the recent economic information doesn’t change our forecast a whole lot,” Winzer says. “We had already been expecting a very slow recovery.”
It continues to be a great time to consider a purchase of a property. In Marin County we continue to experience a strong buyers market, although in sought after areas that may not be the case (where some properties may have multiple offers).
Article excerpt from MSN.com