Are we out of the housing recession?
According to the Clear Capital Home Data Index (HDI) Columbus is ranked number 5 in a list of cities with increasing home values. The HDI covers the 50 largest cities in the US. It predicts year to year changes of home prices.
A total of 35 cities will further depreciate in 2011, according to the report. Virginia Beach VA may experience the worst loss in value of 12.8%. Dayton, OH, is number 4 with a projected loss of 11.7%.
On the positive side home prices will increase the most in Washington DC with a projected gain of 6.5%, while Columbus is number 5 with an increase of 2.1%.
This means that you will have to pay more for Columbus OH homes for sale in 2011. But that’s not the only bad news for home buyers.
It appears that home loans will also become more expensive in April!
There are 3 reasons why you will have to pay more for home mortgages in 2011:
- FHA raised their mortgage insurance premium by 1/4% starting April 18, 2011. This may not sound like a lot, but it will increase your monthly payment (around $20 for a $100K loan).
- The government plans to wind down Fannie Mae and Freddie Mac. To eliminate the advantage they have over private lenders, Fannie and Freddie will increase down payments to 10%, reduce the loan limits to 2008 levels and generally raise their fees.
- Interest rates may rise. There is a good chance that inflation will go up. Although the housing market is still depressed, the rest of the economy seems to be growing nicely. Combined with the ever increasing cost of our federal debt, inflation will rise and so will mortgage interest rates. Currently, they are still at historic lows.
All of this does not happen overnight! But it should serve as a warning for home buyers like you.
You still have a chance to buy a house at the current terms, at historically low interest rates and discounted prices, which are very favorable to owner occupant buyers. Please act soon – it won’t get any cheaper in 2011!
Thanks for reading the susannenovak.com Blog!
Posted by: Susanne Novak, ABR, FIS, GRI
Columbus Real Estate Agent helping First Time Buyers.