Have you heard the big news this week? No, not about LeBron going back to Cleveland. He will continue being rich no matter where he goes, no doubt.
The REAL big news, about the U.S. budget gap shrinking to its narrowest spread since 2008. What this means - in addition to reined-in spending - is that tax coffers are getting fuller, thanks to a growing economy. More Americans are employed than a year ago, and consumers have responded by purchasing more goods. In addition, the government is paying out fewer unemployment claims than it has the past several years.
The irony here is that home values have rebounded so much since the recession started that some homebuyers have been priced out of the market. This is compounded by another problem: Interest rates have dropped so low that owners are now wary of selling, creating a supply shortage. Lots of homeowners are instead opting to turn houses into investment properties, looking to make profits on mortgage payments via monthly rent.
The good news is that logically, the market has to correct itself if home sales fall much more. The rise in home prices has more or less plateaued, and interest rates have stayed fairly steady as well, despite the Fed announcing it will end its quantitative easing stimulus by October.
Ebbs and flows in the market are naturally to be expected, and it's hard to predict when the "perfect" time is to buy a home. Having all the pieces line up at once - stable, high-wage jobs; strong credit; low interest rates; moderate home prices - are difficult to nail down. This might actually be one of those rare times that for lots of people, many of these pieces have fallen into place.
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