It looks like the majority of U.S. housing markets have bottomed. So, if you’ve been thinking about buying investment property, this may be the time to make your move.
When the National Association of Homebuilders released its NAHB Index for October last week, it showed a drop of one point in homebuilders’ view of the market, from 19 to 18.
The good news: The index is at double its level from last spring – when it bottomed out at nine – meaning homebuilders see an improving market.
The bad news: The index is based so that a reading of 50 is the “neutral market” view. That means there’s a long way to go.
30-year mortgage rates are still close to their all-time low, currently around 5.1%. But rates probably won’t remain that low for long. Building inflationary pressures and the huge U.S. budget deficit will combine to eventually push interest rates higher.
Even if house prices drop by another 10% in some markets (except in the very worst areas, I wouldn’t expect too see anymore than that), you still may end up saving more on financing costs by buying now than you would by waiting for any further declines.