Cold Glass of LemonadeIt’s summer here in Las Cruces, New Mexico. If there is one thing that I enjoy during the warm summer months, it’s an ice-cold glass of lemonade.

Have you heard that some city governments have been shutting down front-yard lemonade stands? Well, I’ve been busy perfecting the art of making homemade lemonade in my own kitchen.

I learned a few things about turning lemons into lemonade from my 90-year-old grandmother who recently passed away. You have to pick your lemons at exactly the right time to make the perfect glass of lemonade. If you pick your lemons too soon, they will be juicy but lack that yummy tartness that makes lemonade so great. If you wait too long to pick your lemons they will dry up and get bitter.

Timing the purchase of your new home can feel a little bit like trying to make the perfect glass of lemonade. With all the negative news you hear these days, it is easy to feel like the world is full of either overripe or under ripe lemons.

The truth is now is the best in generations to purchase a new home.

The Perfect Blend

There are two main economic factors that impact your decision to purchase your dream home: price and interest rate.

Fearful buyers become too focused on price alone; fearing that home prices will continue to drop.

Savvy homebuyers like you know that both price and interest rate make today the best time to buy.

Home prices may not continue to drop, but it will be decades before you see interest rates this low again.

The perfect blend of record low interest-rates coupled with the tremendously low new home prices make today the perfect time to “pick” your new home.

Higher Rates = Higher Payment

Purchasing your new home at a fixed 30-year interest rate today will actually cost you less in your monthly budget than waiting for prices to drop but buying at a higher rate.

According to Wayne Yamano, Vice President and Director of Research at John Burns, many people are just assuming that mortgages rates will stay low forever and that home prices will continue to fall. That will likely change soon.

30 year fixed conventional mortgage graph

“If prices stayed flat and mortgage rates inched up 1 percentage point from 4.5% to 5.5%, the same house would cost you 12% more per month to buy. A movement from 4.5% to 6.5% would increase your mortgage payment by 25%. Needless to say, the impact of mortgage rates is tremendous.”
Wayne Yamano

Look at the history of interest rates over the last 40 years, it’s only a matter of time before rates jump again.

Put in a different perspective, Yamano compares a downward change in prices coupled with an upward change in interest-rates.

Monthly payment on 200k mortgage chart

“Did you know that if prices fall another 10%, but mortgage rates rise 1 percentage point, fewer people will be able to qualify to buy a house? Add to the equation the discussion in D.C. about reducing the allowable Debt/Income ratios on mortgages, and even more people will be unlikely to qualify.” Wayne Yamano

Maybe you’re not in the market for a new home just yet. Maybe you prefer to wait another five years before making your next move.  But if you are ready for a change let this be a word of encouragement for you.  Now is the best time to pick those lemons and turn it into the perfect glass of lemonade. When it comes to buying a new home, there may never be a better time than now to pick your home!

Picacho Mountain has the perfect home for you. Give us a call today at 575-523-2500 and we’ll help you select your home.



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