Is 2012 a good year to buy a home?
Home prices are going to stabilize after the sharp drop of the latest months
When Obama took office in 2009, he promised to take swift actions to tackle the mortgage crisis and revive the housing market, but his efforts to lower borrowers’ mortgage rates through his signature foreclosure prevention program – HAMP – and refinance program – HARP – were not successful. More than 3.5 million people cannot keep up with their mortgage payments; furthermore, home prices have fallen for six months straight.
Anyway, 2012 should bring good news for the housing market and prices should finally stabilize and stop falling. Prices dropped another 5% or so nationwide in 2011, but economists are forecasting a reverse course in 2012. Most of the country will actually see a slight uptake in prices: experts are predicting a 1.2% increase for 2012. So, 2012 will be a great year to buy a home: buyers will find cheap prices, record low mortgage rates and very little competition in many places. Small homes that are close to restaurants and retail stores will be the most demanded properties, because they have a higher resale potential. The good news for buyers in 2012 is that economists are expecting rates to stay between 4% and 5%.
“One thing we’ve learned throughout this housing boom and bust – says Amanda Gendler, of CNN Money Magazine – is that buying is a great thing, if it’s appropriate for you at the that moment given your lifestyle, your goals and your income”. Buying in 2012 would be a smart decision for a potential buyer with a stable financial situation. On the other hand, if there is a chance that a buyer’s job is at risk, it would be much better to wait for a better moment.