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Should you buy in 2013?

By Judy Martel · Bankrate.com
Tuesday, December 18, 2012
Posted: 9 am ET

Wondering if 2013 will be the year to become a homeowner? A look at prices and mortgage rates provides a favorable outlook.

As I noted in my previous blog post, mortgage rates are still low, and the Federal Reserve's announcement last week that it would continue its bond-buying program into 2013 will keep them low. They might rise if Congress doesn't resolve the "fiscal cliff," notes Greg McBride, CFA, Bankrate's senior financial analyst. But he added that "Even if today's 3.5 percent rates became 4 percent sometime next year, those rates are still low enough to enhance affordability."

What about home prices? Opportunity arises there, too, as prices stabilize. There will be an emergence of buyers who were waiting for prices to drop. More sellers will be able to afford to put their homes on the market. Some areas of the country are already seeing multiple offers on homes for sale.

Real estate research firm Fiserv predicts that home prices will rise 1 percent from fourth quarter 2012 to the end of 2013. From second quarter 2013 to second quarter 2014, the firm predicts a price increase of 3.4 percent. "Housing is finally turning the corner," Fiserv chief economist David Stiff said in a statement. "There is no reason to be fearful of further large price declines."

When it comes to obtaining a mortgage, borrowers still need good credit and proof of income. The days of easy credit are long gone, and borrowers are more knowledgeable and cautious about getting in over their heads financially than they were during the heady days of the housing bubble.

Keep up with your wealth and mortgages, and follow me on Twitter @JudyMartel.

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3 Comments
Bill
December 18, 2012 at 10:35 pm

Really? Did we read the same article? The article that I read stated in no uncertain terms, "Now is the best time to purchase a home!" Today is a better day to buy than yesterday was, and prices will rise out of your reach if you hesitate. Sage advice from an unbiased real estate broker never goes out of style.

Lono
December 18, 2012 at 9:29 pm

Thoughts - didn't the Fed say they would not touch interest rates until unemployment was under 6.5%

Also, housing is incredibly important to our economy. So, forecasting doom can cause it, too. Allow me to 'splain.

You could tell everyone a bank is about to fail, even if it is fine. everyone would then pull their money out and the bank would fail. Then, you get to say "See, told you so."

Having said that, I think it would be more responsible morally to report the optimistic aspects of housing. Prices are still way lower than they were 5 years ago, and so are interest rates.

thanks,

Lono
Denver, CO

diane easterday
December 18, 2012 at 5:25 pm

People are not going to want to pay the new G-tax that will be
hitched to real estate transactions....nothing to do with home mortgages or housing at all. The tax is essentially a tax to help pay for making the new illegals, legals to defray the cost. what is this country coming too?