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My fiance and I are looking at houses and the option of building a house (in MN). We are currently renting and saving up for our wedding in December. After the 1st of the year I want to start getting serious and start building equity. I try to keep up on following the market, but honestly, I am confused as all hell right now. Can someone please (in laymans terms) break down whether or not now is a good time for first time homebuyers. And also please include a brief overview of how/why mortgage rates are fluctuating and affecting the stock market? I get confused with all the "jargon".. Thanks!

Please do not post worthless websites!!

2007-09-05 06:40:00 · 2 answers · asked by miggitymaggz 5 in Business & Finance Renting & Real Estate

2 answers

It's a good time for a buyer in most places, in that there are a lot of homes on the market and a lot of people eager to sell, so you might be able to find a good deal.

If your credit isn't good, or if you don't have a down payment saved up, it's a bad time, since mortgages have gotten much harder to get recently and requirements have tightened a lot.

2007-09-05 08:21:26 · answer #1 · answered by Judy 7 · 0 0

MOST markets are in what is called a 'buyers' market. That generally means conditions are more favorable to a buyer than the seller. What makes today’s market a buyers market - is simply inventory. Many metro areas have more inventory than what is selling from month to month. With the surplus of homes on the market, buyers are able to offer lower than asking prices and the sellers (wanting to sell) accept the lower offers.

Interest rates are somewhat stable - and have been over the past 18 months. What IS affecting the stock market is the subprime mortgage fallout. MOST all lenders sell 'bundles' of loans on the stock market - called mortgage backed securities - they turn around and make more loans. In the past these loans MADE more money than the PRIME loans (they were at higher interest rates as well) But as investing goes the higher the risk the greater the payoff. Well, long story short, subprime mortgages are not performing as good any more. So the market is feeling the pressure of poor performance.

There should be NO long term effect on the market - more of a knee jerk reaction as lenders tighten lending criteria. Over all the real estate market is expected to level off - some areas they are already predicting have hit the bottom and will now see normal markets.

At this time, buyers are able to get some good deals on homes at still low interest rates. Do research on the market area before you buy, now the neighborhood and what homes are selling for - information is always the best resource.

Hope this helps and Good Luck
www.bankrate.com (for interest rate research)

2007-09-05 14:36:23 · answer #2 · answered by Anonymous · 0 0

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