Are mortgage rates really low now?

Mortgage rates hit their lowest points in decades in late ‘03 and early ‘04. Rates are still historically low so loans are still a pretty good deal.

We seem to be at the beginning of a housing slump. While loans are a good deal there seems to be downward pressure on home prices. If this trend continues than you may be able to get a better deal on a house in the near future (or perhaps not, it is hard to predict the future).

In general when home prices drop, homes in desireable neighborhoods tend to keep more of their value than those in less desireable areas. As they say, in real estate the three most important things are location, location, and location.

The most important question would be, Is this a good time to buy a house for you? Experts say that you shouldn’t buy a house you plan on living in less than 7 years. Are you sure you want to spend that long in the house you are looking at? Long term, owning your own home is a good investment but short term it is a gamble since prices could go up or down in the next few years. Loans are probably not going to go back down to where they were a few years ago but are also unlike to suddenly rise dramatically either. More expensive loans also tend to push home prices down since buyers can’t afford as much house with an expensive note.