People Are Massively Selling Their Houses. What If The Time To Buy Is Coming?

Not so long ago people were paying excessive amounts of dollars for a house: Why? Some of them thought that owning a house was 'cool', others believed that was the 'right' time because houses would be infinitely increasing their prices. BUT, we are here to tell you exactly what they did: they bought the peak, what some important guys on finance call: 'buying the top', sure, as you might guess, doesn't look like the smartest thing to do in life.

Now you have an advantage over thousands of people just for reading this: buy when others are desperately selling, NOT when prices are on the moon! As Baron Rothschild said: "the time to buy is when there's blood in the streets." (1)

We might be entering a new stage on the market, in fact, the time to buy is closer than we think, but please don't believe us blindly, verify it by yourself with the best offers on the market at this moment.

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But first, let's start by clarifying a few things:

What Is a Sell-Off?

A sell-off occurs when a large volume of securities are sold in a short period of time, causing the price of a security to fall in rapid succession. As more shares are offered than buyers are willing to accept, the decline in price may accelerate as market psychology turns pessimistic. There are several potential triggers of a sell-off, which may include the release of disappointing earnings reports or poor guidance, fears of increased competition, or the threat of technological disruption. Broader causes, such as macroeconomic concerns or natural disasters, can also trigger sell-offs. A sell-off may be contrasted with a market rally.

How Sell-Offs Work

Sell-offs occur based on the principle of supply and demand. If a large number of investors decide to sell their holdings without any compensating increase in buyers, the price of that investment will fall. Sell-offs are a reflection of investor psychology. For instance, if a sell-off occurs after a new earnings report, the sellers may have been overly optimistic about that security when they bought it beforehand. For contrarian investors, sell-offs can present an opportunity to buy at low prices. If investors believe that the sell-off was unwarranted or overly extreme, they might take the opportunity to buy the security at a “bargain” price. (2)

What Will Lower Housing Prices?

Prices could fall as the Federal Reserve continues to raise interest rates, although some fear that could tip the economy into recession which of course would lower house prices. And there are some signs of weakness in housing markets. For example, new private housing starts have barely reached the levels of just before the 2007 economic collapse. There seems to be some slowing of price increases in places where the tax bill has its largest negative impacts. And slow income growth for many American households means that buying a house is moving beyond their reach. A recent report concluded that in twenty large metropolitan areas, middle-class families are increasingly unable to afford a house. (3)

When Is The Best Time to Buy a House?

Both national and state or local factors can affect the housing market, and your decision to buy. Nationally, things like interest rates, the job market and the overall health of the U.S. economy can impact the housing market. On a more local level, your decision to buy could be affected by buyer demand, the local job market and the local rental market. If mortgage interest rates are low, home buying is inherently more affordable, and it makes buying a feasible option for more people. It’s beneficial to shop rates even for small rate improvements. Here’s an example:

The current average 30-year fixed mortgage rate is hovering around 3.8% (as of September 2019). Let’s say you want to buy a $300,000 home with 20% down ($60,000). Your monthly mortgage payment (not including taxes, insurance and other costs) can vary by more than $100 a month, just based on a one-point increase in mortgage rates:

• At an interest rate of 3.8%, your monthly mortgage payment (principal + interest) would be $1,118 per month.
• At an interest rate of 4.8%, your monthly mortgage payment (principal + interest) would be $1,259 per month.

Lower interest rates can also put more expensive homes within reach for some buyers, assuming you’re also able to increase your down payment to avoid paying private mortgage insurance. For example, with a 3.8% interest rate, you could buy a $337,000 home with a 20% down payment ($67,400) for $1,256 per month — that’s $3.00 less than buying a $300,000 home with an interest rate one point higher at 4.8%. (4)

That being said, it's time to start doing your research, before leaving let us know which one you found better, take a look at the hottest offers on the market right now for more information.

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