Categorized | Finance and Mortgage

Potential Homebuyers Still Not Ready to Enter Market Despite Low Rates

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While the commercial real estate market, and the luxury residential real estate market both seem to finally be seeing increases in sales, the average residential real estate market as a whole continues to struggle. Even with historically low rates on fixed-rate mortgage loans, buyers are hesitant to enter the market. Their hesitation is largely due in part to the general public’s anxiety regarding the economy as a whole.

Some analysts insist that there is no better time than now to buy a house. However, the majority of buyers seem to be ignoring that advice, as their concerns far outweigh the potential benefits of taking advantage of the current low rates. One of the biggest causes for anxiety is the abysmal state of the job market. People are worried that they may still be faced with unemployment in the near future, thus limiting their potential income. With that in mind, people are afraid of entering into a commitment involving long-term payments.

The volatility within the stock market, and the recent downgrade in the credit rating of the United States also have not helped convince potential homebuyers to enter the market. Such turmoil has led to a heightened uncertainty that overshadows that benefits of the current low mortgage rates.

Lastly, others are citing state budget woes as a reason to avoid entering the housing market at this current moment. With states cutting education budgets, there is uncertainty as to what school districts will suffer the greatest consequences. The school system is one of the biggest factors that people consider in buying a home, and most people do not want to buy a home in a school district that lacks in resources due to budgetary woes.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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