Price and Terms

It is a sunny spring for buyers due to the fact that when they buy now they have the advantage of Price and Terms.  It is not typical for price and terms to be good at the same time.

 

Terms are the financing available to buyers.  Interest rates are at a 50 year low. A 30 year fixed mortgage for both FHA and conventional financing go from 4.5to 5%.  That can be quite a savings per month or it allows the buyer to qualify for a more

expensive property.  FHA has increased in the metro area of the Twin Cities the purchase price of an FHA  property to $365,000. That is more than just a little starter home.  The step-up buyer can take advantage of this type of financing.  It is important to also point out that in the future this FHA mortgage can be assumed by a future buyer with qualifying.  That means the this 4.78% mortgage might be very attractive when the house goes on in the market in the future and rates are 7%. Jumbo financing for upper bracket houses has gotten more attractive with allowing 15% down and not charging private mortgage insurance. Borrowing money is cheap.

 

Add to the inexpensive financing lower price houses and you see the sunshine.  All properties have devalued and most likely have reached their bottom or near bottom in the Twin Cities.  The house that might have been $325,000 two years ago is now available for somewhere in the $290's.  A buyer should attempt to buy as much house now due to the lower prices and stay in the house longer.  We are back to slower appreciation and owners needing to own the house for 5-7 years before selling.

 

We can create a long list of songs with sunshine in them.  The sun makes us feel so good that we sing about it, draw pictures of it, paint our rooms yellow, go on vacation and lay in it, and we can take advantage of the "man made" sunshine and buy a house.