With all the talk about us being in a buyers market currently, one might wonder where all the buyers are at. You can look around the country as see that tons of neighborhoods are plagued with homes for sale by individual sellers and banks also. So what exactly is a buyers market?
This market can be applied to the old rule of “supply and demand.” When the supply is low the price increases, but when the supply is high the cost decreases for that particular product. This is the market we are in now, where the amount of homes for sale out way the number of buyers. “Hence, a “buyers market.” The terminology can be a bit deceiving, but that is exactly what we are in. There are lots of homes for sale and very little buyers in this current market.
You might be asking where are all the buyers and the answer to that will be in 2009. This is the year where the first time buyers market comes back into action. The reason the first time buyers market disappeared was because of the cost of homes. The cost of homes increased at such an alarming rate around the US that it squeezed the first time buyers out of the game. With home prices falling around the country now it is more affordable for this market to pick back up where it left off.
There are a couple of concerns that worry the housing market and that is inflation and financing. Current interest rates are in the mid to upper 6 range, and if inflation continues to be problem rates will increase after the first of the year. Also the financing arenas have tightened up and now will require money down to get financing in place. So this could be a possible issue going into 2009.
My best advice would be to mange your credit report, and if you are not aware what is on your credit report pull a copy of your free credit report today. You should also save your money for down payment; FHA will require 3.5% investment on any loan financed after October 1st of 2008.
With all the banking scandals and bad loans underwritten, you can count on financing being a lot tougher now. So be better prepared so you will not have issues getting a loan in this current lending market.
