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Don't Let the Naysayers Give You Bad Mortgage Advice
By Jonathan Haeber
CMR Columnist
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In July, the National Association of Realtors found that existing home sales fell 4.1 percent, causing many economists to bite their nails and sit on the edge of their seats. One authority on the subject even said that the existing housing bubble would drag the economy into a nastier, deeper recession than in 2001. Real Estate author Blanche Evans doesn't think the housing bubble is much to fret over.
"Stay put and improve your home," Ms Evans told the New York Times. "Wait out the slump. Use the down market as an opportunity to update your house and make sure it looks good. Then when the market improves, your property will compare more favorably with others."
Evans thinks the current housing slump is more like a "breather," rather than a doomsday age for real estate. In fact, this "slump" could be a good thing for the average home owner. In the past few years, she says, real estate speculators have caused prices to inflate. Now that the market is heading south, the speculators are leaving and the average person looking to buy a home for themselves, rather than as an investment, is going to find purchasing a home a lot more manageable.
Another reason for the slump has been rising interest rates. Most economists predict that the Federal Reserve is done raising rates; recently, the prime rate for mortgages has even been dropping. This spells out good news for the market. It also presents an opportunity for homeowners to refinance their home mortgage at a lower rate.
Whatever the case, Evans thinks that the best way to deal with the current housing market is to wait it out. For current home owners, this means using your home equity to make much-needed improvements that could increase its value in the future. For prospective buyers, purchasing may not be such a bad idea, but only if you can set the terms when you decide to buy at a reasonable price in a reasonable place.
Source
A Soothing Voice Among the Market's Chicken Littles
About the Author
Jonathan Haeber is a marketing writer for Discovery Channel Stores. He recently purchased his first home, and took a self-taught crash course in home mortgages.
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