So Far, Things Are Better Than Expected This Year

As 2009 was coming to a close, the “experts” were busy making forecasts about the U.S. economy and what to expect in 2010.

When it came to the housing market in Des Moines, two predictions were made again and again:

1. Home prices would fall in the first half of 2010
2. Mortgage rates would be higher in 2010

Well, it’s July 1 and the year is half-over.  Both predictions are proving to be incorrect. Home values are really rising in most markets and mortgage rates are down. Way down.  Like, really, really low.

It reminds us that economists are much more skilled with analysis of the past than predictions of the future.

There is Always a Chance for Change, Good or Bad

Think of Urbandale housing market predictions like watching a local weather forecast. A meteorologist can look at the radar and tell you that rain is coming, but it’s never with 100% certainty.  There is always a chance of change.  In fact, it’s an ongoing joke in most social circles that the weather man is always wrong.  Sorry local weathermen.  I still like you.  We’re just saying “circles” of people talk.  Not me (!).

Well, the housing market is the same way.  Just as the U.S. economy is unpredictable, so are housing prices, and so are mortgage rates.

Therefore, when you have a personal finance decision to make, evaluate your options based on the information at hand today rather than an educated guess about the future. The future, after all, is subject to change — despite what the experts forecast.

If You’re On The Fence

Now, if you find yourself on the fence and not sure of what to do, it’s a good time to look over your options.  A smart buyer or seller is looking at the numbers and making an informed decision.  To make an informed decision (in my opinion), you have to look at two things.

1. The cost of homes
2. The cost of money

There are two things that are for certain in this market.

1. Home prices will continue to decline
2. Mortgage rates will have to rise

The trick is weighing out why you’re considering purchasing a home.  Timing is everything, but you’ll never pick the “best” time.  The only time you know the mortgage and housing market have “bottomed” out is by looking in the rear view mirror.  Meaning, the bottom has already passed.

If you need some help crunching the numbers and deciding what makes most sense for you and your family, give me a shout.  I’d be happy to help — and — I’m one of those people that likes loves to crunch numbers for people.  I can do the not-so-fun number crunching and then do the fun talking through it stuff with you.

You can email me or call me at the number off to the right of this blog post.  I live and breath this stuff.  I’d be happy to help you out!

Tagged as: Home Values, iowa mortgage predictions, Mortgage Rates