Buying a new home for first-time homebuyers or even repeat buyers may be more difficult in 2011 then some had hoped, as there are mixed reports over whether the housing market is beginning to improve, due to the fact that there are still some questions as to whether home prices are recovering and if there will simply be a demand for new homes in an amount that will begin combating the number of homes that are sitting empty due to foreclosures. Obviously, some feel that the housing market at the present time can provide a great opportunity for new buyers, due to the fact that interest rates are still low, but rising, and home prices are still quite affordable as well. Yet, there are those who dispute whether 2011 will bring success and improvement in the housing market.
As there are indications that interest rates on home loans are beginning to increase, there are still some homeowners in the position to take advantage of incredibly low rates and prices, but there are some who feel that homeowners may be hesitant to buy due to the fact that many officials believe home prices may continue to drop. An article on MarketWatch.com stated that prices have continued to fall, on average, and there is also concern that, “Prices could fall 10% to 15% on a national basis this year.”
Obviously, new homebuyers would want to take advantage of low home loan prices and rates, but many feel that if they buy a home there is a good chance that their price could fall this year, which could potentially put them in a negative equity situation in severe cases. However, there are some officials who feel homeowners may need to have more urgency in their decision to purchase a new home, due to the fact that there could be higher prices for mortgages when individuals not only buy a new home but choose to refinance. There are indications that mortgage lenders may require homeowners to have more money when they either purchase a home and offer a down payment, or in some cases, homeowners who are refinancing may have to meet higher costs as well.
Yet, despite some who have a negative view of the housing market in 2011, HousingWire.com reports that there are institutions, like Freddie Mac, who feel the housing market is set to see an increase in home sales in the spring of 2011. However, officials caution potential homebuyers, no matter where they stand on the future of the housing market, to be cautious when looking at new opportunities for homeownership, as factors like cost, mortgage rates, and property values in the area they wish to buy must all be considered. While some homeowners feel that any drop from current low levels of home prices could be minimal and perhaps the loss would return in the coming years, a decrease in property value is something homebuyers must consider no matter if they are in the financial position to benefit from current low home loan prices and low interest rates when buying a home.