I suspect interest rates will stay low, at least for the next few months. Housing inventory (both new and resale) in Rancho Cordova will likely continue to increase. If circumstances in your personal situation are such that a purchase now makes sense - go for it. If you are looking at things from a strictly financial point of view, you could potentially benefit by waiting a while...
How long do I think it will take for the housing market to pick up again? Impossible to tell. Christian, below, is pretty optimistic, and he could certainly be right. I'm not as confident. I'm looking at a time frame of 4-5 years. So, simple answer is: we don't know. But, as is frequently suggested here, if you're planning on living there for 5 years or more, you'll probably be OK.
You list a lot of great numbers--a 4.875% 30 year fixed loan, a 6% incentive. That's nice. But that's just icing on the cake. The real questions are: What's the price of the house? How does it compare with what the builder charged for other similar houses in the same development? Further, what are the comps? If you're overpaying by 10%, then a 6% incentive and an interest rate buydown doesn't compensate. You need to look at the whole picture, and the primary element in that is the price you're paying.
You ask whether it's a good time to buy now, or should you wait? Assuming you can comfortably afford the house...assuming it's a good value when you factor in the price and comps...and assuming you're pretty sure you'll live there for at least 5 years, it's probably fine to go ahead and buy now. On the other hand, if any of these tests come up negative--you can't afford it now...or it's not a good value once you factor in the price or consider the comps...or you think you'll only be there a couple of years, then you should definitely reevaluate the decision.
Hope that helps.
You've got a great set of circumstances at play, I would go for it!
Good luck from New Jersey!
Is It A Good Time To Buy A Home? The simple answer is YES! It is still a good time to buy a home. With the help of the right agent, you can make this "good time" into a "great time" for you and your family. The news is full of stories about the housing crisis, homeowners losing their homes, and the overall bad state of the economy. Not all of this news, however, has to translate into dissuading you from buying a home. In fact, right now is a very good time, especially for some, to jump in and achieve the American dream of home ownership. As of late, the housing market is starting to look better. Read on for more information about why it is still a good time to buy a home.
First, the government is looking to help you. If you are a first time buyer (which, to the government, is defined as anyone who has not owned a home in the last three years), you are entitled to a maximum $8,000 tax credit. Additionally, interest rates are at all-time lows and the Federal government is taking steps to insure and make these loans available to more and more people.
Leverage. Leverage is defined basically as borrowing money to supplement existing funds for
investment. Imagine if you invested ten thousand dollars in stocks and those stocks earned ten percent, you would have earned one thousand dollars. But investing ten thousand dollars on a home, and having that home's value increase ten percent; effectively, you would have earned ten thousand dollars. Which sounds like a better investment to you?
Next, you have to live somewhere. And so does everyone else. According to nationwide statistics, approximately 800,000 new households are created each year in the United States alone. Each of these households will need housing, regardless of the state of the economy. This fact alone ENSURES the recovery of the housing market.
Cycles. The economy is a cycle, and like a cycle, what goes down must come back up. Once this happens, it will create INSTANT equity for you. That means you will have earned FREE money just by living in your home, which you are going to do regardless of where you live. Why not buy a home and earn free money in the process?
Mortgages. Many people think a mortgage is just like paying rent, right? WRONG! With the right fixed-rate mortgage, you are basically ensuring the same payment for thirty years. If you try to rent an apartment for thirty years, odds are that every year or so, your rent will be increased. That does not happen with mortgages.
Ownership. Owning a home is a GREAT accomplishment and it allows you to express yourself in the best way possible. You can decorate it any way you want, furnish it, paint it, and improve it and all the while you will be increasing its value and the value of your investment. Ownership also gives you and your family a sense of stability and a place to lay your roots.
These are only a FEW of the reasons why right now is a good time to buy a home. A qualified agent will be able to answer any questions you may have and also give you more reasons to consider investing in your next home!
Though prices will definitely go lower from here, the issue I have with waiting is what you'll be able to qualify for in the near future. Currently 5% down is the standard minimum...Starting Monday two of the largest loan insurers, PMI and MGIC will start requiring a 10% down for loans they'll insure.......the rule of thumb here: as home prices fall, lender requirements tighten......do you even know if you have a conditional lender approval yet? If not, you should be asking....
Frank Biganski, Realtor ABR
I know that I looked at a development where the builders largest home was going for $599,000 in 2005/6/7 and you can now find people trying to unload the same model home they bought in 2006 for under $400,000.
The builder incentive isn't always the best best, especially when it is tied to using their lender. Push them for the same incentive regardless of who's lender you use and get their lender to compare against other lenders. You can use offerangel.com to get an apples to apples comparison of the offers. Get a good faith estimate and check to see if their fees chew away at that 6% pretty fast. A lot of builders will specify in their contract that you have to use their title company, even though technically they cannot force you to use a specific title company.
Above all else have a real estate attorney review the contract if you do not understand it. Builder contracts are written to protect their interests and many will not budge on changing them. Remember if a particular housing feature or incentive isn't listed in your contract and/or addendum's, then you will not get them.
If you are buying just to invest in real estate...no one knows. But, if you are buying a home for your family you plan to be in for a number of years and you love the place I don't know that you can beat the deal!