A question that we as Realtors® often receive is “When is the best time to buy a home?” It is a question that is tough to answer because it is a very personal decision and should be based on your personal situation. However, if you’ve made the decision that you want or need to buy, then the best time to buy is always now. Let’s look at some of the reasons why.
First, mortgage rates are currently the lowest they've been in a generation. Nationally the rates on thirty year fixed rate conventional mortgages are around 3.25% and 3.75% on FHA insured mortgages. The mortgage payment on a $190,000 loan for principal and interest would be only about $853 per month at a 3.5% interest rate compared to about $962 per month at a 4.5% interest rate.
Second, home prices in southwest Louisiana rose less than 1% in 2019. The average sales price in 2018 was $204,737. It rose to $206,416 in 2019. This rate of increase will probably go up faster in 2020. This data is according to the Southwest Louisiana Association of Realtors® statistics.
Third, the number of homes available on the market right now has remained steady over the last six months. We now have slightly over 1,000 homes for sale through the Southwest Louisiana Association of Realtors® Multiple Listing Service.
For new buyers looking to save on monthly payments, this is great news. Homes you might not have been able to afford just 2 or 3 years ago are now well within your reach at a rate that makes much more sense than renting, in many instances.
Many buyers are asking “I keep reading that rates are going lower, should I wait to buy?” Trying to time the bottom of any market is like trying to catch a falling knife with your bare hands. You're going to lose every time. As a matter of fact rates are so low that the number of current homeowners looking to refinance their current loans is skyrocketing. This may create such demand that the mortgage finance industry may not be able to keep up. This could cause rates to rise just because of demand for money.So it seems that NOW is the time to buy!
By R Patrick Diamond, ABR, CDPE, CNHS, CRS, e-PRO, GRI, RCC
R Patrick “Pat” Diamond is an Associate Broker with the Diamond Difference Team at RE/MAX Realty Pros, a full service real estate firm located at 1180 E McNeese St, Lake Charles, LA 70607. E-mail any questions about real estate to r-patrickdiamond@remax.net. His company’s website is www.swLouisianaHomes.com or www.remax.com. Mr. Diamond is a three time past president of the Southwest Louisiana Association of Realtors® and was the 2001 President of the Louisiana Realtors®.
