When it comes to home prices, there’s always someone who benefits and someone else who suffers. Today, news that prices didn’t increase as much as had been predicted in August 2010 is likely to disappoint many. For the housing market and those looking to get away from an underwater mortgage or sell their home, a small increase in prices is bad, but for those looking to buy, this could be good news.
S&P Index Shows Home Prices Increased Less than Hoped
The August S&P/Case Shiller composite index found in 20 metropolitan areas, home prices rose 1.7 percent from August 2009, which is a much slower pace than the 3.2 percent increase in July.
While some may think seeing an increase at all should be a good thing, experts say this still represents an overall decline in how many buyers are interested in purchasing homes. Low demand and tons of inventory means prices will stay low for some time.
Low Price Increases Not Good for the Market
A small increase in home prices shows that the housing market is still teetering on a rocky foundation. With low mortgage interest rates still very much an issue as well, it’s hard to know just when the market will show signs of improvement.
While low prices and rates should be helpful to the economy (buyers traditionally love both), homeowners and banks are still having a difficult time getting the properties out of their hands. Unfortunately, until this occurs and the government begins to see the market flourish, prices will probably remain low.
Buyers Can Take Advantage of Low Prices
The lack of a home buyer tax credit has reduced incentives for many home buyers to get out and find a home. With the economy in tough shape, many don’t want to take on such a major purchase without solid financial backing.
However, for those who do feel comfortable buying, now is a great time to take advantage of low home prices thanks to foreclosed homes and short sales. It’s true that financing is a bit tougher because banks are a bit leery about dishing out the cash, but some are still willing to lend so don’t be totally discouraged.
Before you jump out there though, it’s good to know how to safely buy a foreclosed home or short sale–or any home for that matter– so that you don’t find yourself making choices you regret down the line. If you make great step-by-step choices, you could get a great home at a great price.
