If you are thinking about real estate investments as an alternative strategy, remember that interest rates begin to rise as a way to curb inflation. The key is to know when interest rates may start to trend upward. March 2010 seems to be a key date when the Fed decides to stop buying mortgage securities and if private investors do not pick up the slack - the result will be higher interest rates. Expect over 6%. Which by the way is still a low interest rate but the increase reduces how much you may qualify for a home mortgage. According to the National Association of Realtors:
Nov 20, 2009 Interest Rate @ 5.15% Median Home Price $174,900
March 2010 Interest Rate @ 6.00% Median Home Price $159,250
So in four short months while we are waiting for the Super Bowl after the holidays, our ability to buy a higher priced home disappears. To invest in real estate, remember the "perfect good storm" - low interest rates, depressed home prices, and willing sellers due to an over supply.
Foreclosures, short sales and low priced homes with LAND should be your target market.
Monday, November 23, 2009
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