Remarkable things have occurred in the real estate market in 2012. Due to an influx of foreclosures hitting all over the country, massive layoffs leaving millions out of works, and the general decline in American wages, interest rates started getting chopped to percentages never before seen. At the end of May, 2012, there were fifteen year loans being offered for less than 3%. Many renters jumped on the opportunity to purchase homes at those unbeatably-low rates.
Long term, or thirty-year, interest rates dropped under 4% in December of 2011, but no one expected that they would continue to drop through 2011. At the end of May, 2012, rates for these long term loans were at 3.75, which was a decrease over rates just the week prior.
This fast dropping of interest rates has stimulated some improvement in the real estate market. While foreign investors have been busy scooping up the lowest priced foreclosure homes, the drop in interest rates has opened the door for more average Americans to make their dreams of homeownership come true.
Since lower interest rates means lower monthly payments, more renters in particular are now able to afford their own home. This is especially true when they shop for foreclosure home and very cheap homes offered on websites like RealtyStore.com. The combination of lower sale prices due to massive foreclosures sitting in the hands of overwhelmed banks and record lows in the interest rate department has created an irresistible opportunity for those who have been dreaming of owning their own homes.
While this looks like great news for homeowners waiting for prices to build back up so they can get a fair deal on the sale of their homes, there are some things still holding some would-be homebuyers back. Some have bad credit after losing jobs in the years past, so they are going with rent-to-own opportunities rather than bank loans. Others realize that they still have to pay the fees, or points, that must be used to get those incredibly low interest rates. The cost of those points is not decreasing like the lowered interest rates.
Even with those obstacles, this is clearly a great time for anyone able to get a loan to become a homebuyer. With so many cheap homes on the market, many are purchasing second homes, vacation homes, or rental homes. With so many bank foreclosures pulling the market down, this is a great time for future homeowners to get great deals on beautiful homes.