Is Now The Right Time for YOU to Buy a Home?

The affordability of new homes and low mortgage rates has allowed homeownership to be more reasonable and desirable than ever. But, does that mean now is the right time for YOU to buy a home?

First, ask yourself this, "Am I buying this home because I am looking for a place to call my own that I know I will stay in for seven to ten years? Or, am I just purchasing because of attractive home prices and low interest rates?"

Here are some things to consider when making the home purchase decision;

Home prices declining in most markets, but not all

According to the National Association of Realtors, the median price of homes sold during January through March of this year was 4.6 percent lower than the previous year. While some markets where hit harder, like Miami, where the median home price declined to 20 percent, some markets saw a jump like Buffalo, New York where the average price of homes sold rose to 10.8 percent.

So what does all this mean to you, a potential Maryland home buyer? Every market is different, that's why it's good to speak to a local professional who knows your market.

Mortgage rates not expected to stay low

Fannie Mae is projecting that home prices will continue to fall during the next three months and will not begin to stabilize until 2012. However, most economists don't expect the housing market to recover until 2014. Does this mean you should wait till 2012 or 2014? Absolutely not. While home prices are likely to remain low in the next couple of years, it is unlikely that mortgage rates will remain low for much longer.

"The chances (mortgage rates) could go up a lot is much greater than the chances of them going down a little bit," says Ed Conarchy, a mortgage planner and investment adviser.

By the end of 2012 the Mortgage Bankers Association forecasts mortgage rates will be close to 6 percent. This means that if you decide to wait to jump into the market when home prices take another dip, you may end up paying more for your home.

Don't look at it as an investment

I know, I know. This one comes as shocker. We were always told that home ownership is the greatest investment we will make in our life time. However, this day and age don't think of home buying as a real estate investment ... at least, not as a short-term one.

If you are thinking about buying a home because the price is right and interest rates are low and in six months the price of the home is going to go up, think again. There are no quick turnarounds in the current housing market. Thinking long term should be the key to your decision to purchase a new home. The chances are very likely that in 10 or 20 years the real estate market will be healthier, but seeing the market turn 360 in three years, is highly unlikely.

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