There seems to be a whole range of things happening in the Real Estate market today ...... a few areas are up, some areas status quo, a few pockets have stalled ..... and the biggest question is " Why are buyers not taking advantage of the unprecidented low interest rates?"
I like to use the KIS philosophy when approaching any topic ... "Keep It Simple" .... The unfortunate part is that the KIS can be taken a little too far or parts may be left out, case in point :
1. The news over the last 8 months, or longer, has been the threat of "Interest rates on the Rise". That in part has been true, but when you peel back the layers you find that the increases have been very low indeed, and when you look a little closer, you will see something even more revealing. The economy, being what it is both home and abroad, will not allow interest rates to rise very quickly over the next 5 years at least. What is more interesting is that even when the rates reach 5 to 6%, they will still be at a "normal" all time low. With that in mind, the cost of mortgages couldn't be better for the buyer.
2. The cost of homes, although they are continuing to rise, that rise has been slowed and today's prices are at or near the "real" market value. This, along with the low interest rates, provides the buyer with the optimal time to invest. You can look at it in two ways, one is to keep your price range on the low side of your budget, or to look at the maximum you can live with in a monthly mortgage payment while interest rates are low. ( NOTE: you should always project what your payment will be in 5 years, considering both the projected interest rates and the increase in equity in your property.) The latter may allow you to get into your dream home earlier or at least jump a rung or two on your "property ladder".