Buyer's Market Right Now

OK, so here's a parsing of the market news that affects home buyers this morning.

The non-farm payrolls report released at 7:30 a.m. reported that the United States added 113,000 jobs in July ... and that unemployment jumped from 4.6% to 4.8% matching our highest level of unemployment this year.

So what?

This is actually bad news that will be good news for the next 30 days for home buyers. Huh?

It just so happens that the Federal Reserve has raised interest rates 17 times in the last three years in an attempt to slow the economy down so we don't get a bunch of inflation. This report is actually a poor reflection on the economy, which means that the Fed's actions are working to slow the economy, which should allow them to "pause" on Tuesday when they meet and leave rates alone.

Bad news why? Well a nation of 300 million people should create about 250,000 new jobs each month. This is less than half that amount so we're not creating a lot of jobs because we are all feeling the sluggish economy.

Why buy a home now then right? Because for the next 30 days mortgage interest rates will reflect some downward pressure. I would bet they will drop 1/4 percent just this morning and hold there next week. In anticipation of the Fed leaving rates alone next week, mortgage rates will actually go down! How's that for the wacky world of our integrated economy?

If you are looking to buy a home, do it this weekend. If you are looking to refinance, do it this week. If you are looking to remodel, get that home improvement loan now. Sure, rates will go back down to 5 or 6% in another 18 months, and then you can refinance again and take out your equity. But right now you'll have a "pause" in the rate increases, maybe even a drop, take advantage of it and buy a home.

Prices of new homes will go up another 5-10% just in our market due to oil, lumber, drywall, copper, and land. Lot prices have doubled in the last four years. You aren't going to see prices go down, even in a buyer's market. Today is the time to lock in your price and your rate and get yourself a home.