Are you planning to wait until spring to begin your search for a home?   Although spring is the classic time of year to buy, you may want to consider the following before deciding to postpone your purchase.

Right now, the most compelling reason to jump into the housing market is the mortgage interest rate, now at all time lows. Smart buyers think in terms of monthly payments and the long term cost of a loan in addition to the purchase price. Currently, interest rates are the lowest they’ve been in over 50 years, at fixed rates of 4.17%.  According to the National Association of Realtors’ Chief Economist, Lawrence Yun, “ Economists are predicting a rise to 5% or 5.5% in the course of the next year.”  That translates to almost $2,000 a year or $57,975 over the life of $200,000, 30-year fixed rate loan.  The risk of rates increasing seems to overshadow the risk of prices falling further.

In addition to interest rates being a major factor,  there are a few other determinants to consider.  Inventory is plentiful.  Nationally, there is a 10–12 month supply of homes on the market, which is considered high.  A six month supply is thought to be a balanced market and is historically the average. We are tracking the national figures.

Prices are the final factor.  “Median prices are lower than they were,” says Lawrence Yun, “and economists expect increases in values during the next twelve months.”   In the Rhode Island market, the median price hit a low in quarter two of 2009 and re-hit that value in Q1 of 2010, but has risen slightly over the last two quarters. While predicting the future is impossible, it does seem like we are at a bottom as the experts are saying.

Considering all factors — the large selection of homes available, a price to value ratio, and especially the cost of your monthly payment, you may find this is the perfect time to start buying your home.

Everyone is asking the questions  “How is the housing market fairing these days, and what are the trends for the future?”  Those are always good questions to which one would like to know the answer, especially the latter. So, with that in mind, I searched for some interesting tidbits on the National Association of Realtors’ site. NAR has a weekly update on the economic indicators and publish this on Facebook.

In their latest release, here are some interesting facts – some of them one would expect. For instance, new mortgage applications and purchase contracts have fallen in May. This is most likely due to the surge in applications through April 30th. Sales of furniture and home improvement products have increased in May while overall consumer spending has gone down some, a possible secondary effect of the tax credit legislation.

But here is an interesting piece of information from this week’s report.  The number of buyers that may not get the tax credit due to failure to close by the 30th of June deadline because of an excessive workload is estimated to be as high as 180,000 nationally. The number is so large that legislators are pushing a bill to extend the closing date deadline to the 30th of September. Short sales seem to be playing a part in this. No one is sure how this is going to affect the market.

Interesting trivia? Certainly. Economic trends? Maybe. While the overall sentiment and data are pointing to an interesting time ahead, there seems to be one constant over the years in economic cycles. The economy recovers when everyone thinks there is a recovery brewing.

The National Association of Realtors recently posted their views on the commercial real estate market in the United States. Mainly they see investment in commercial properties to start a rising trend, with the caveats of how employment trends continue, seasonal retail sales, and the amount of increase in financing for commercial properties – which is finally starting to show life.

Here’s their video.

The National Association of Realtors reported a 9.4 percent increase in sales of existing homes from August to September, the largest increase in more than two years. Total housing inventory at the end of September fell 7.5 percent to a 7.8 month supply at current sales pace, down from a 9.3-month supply in August. The median existing-home price fell 8.5 percent in September from a year ago to $174,900. Distressed properties accounted for 29 percent of sales and continued to downwardly distort  the median price. Single-family home sales rose 7.7 percent  more than  a year ago. The median existing single-family home price was $174,900, down 8.1 percent from a year ago.

Condominium and co-op sales were up 9.7 percent from August to September, a 21.2 percent increase from a year ago. The median existing condo price was $175,100 in September, down 11.7 percent from a year ago. Sales in the Northeast increased 4.4 percent from August to September, an 11.8 percent increase from a year ago.

The median price in the Northeast was down 7 percent from a year ago, to $234,700. And according to data released by the Rhode Island Association of Realtors today, Rhode Island existing single family home sales rose 27.9 percent in September and days on the market dropped to 87 from a high of 109 earlier this year.  There is currently a 6.8 month supply of single family homes for sale, down from a 14-month supply in January.

This Week’s Real Estate Insight:

Early information from an annual NAR consumer study to be released Nov. 13 shows first-time home buyers accounting for more than 45 percent of home sales in the past year. The National Association of Realtors is lobbying for an extension of the first time homebuyer credit. We Realtors believe that the extension is critical to continued recovery of the housing market.

There’s a Yiddish word, “kvell,” which means beaming with pride and enjoyment, it is generally used when referring to the accomplishments of one’s children. Since I consider everyone at RPL to be my extended family, I am fortunate to have many kvelling moments, last week at the Squantum Club I witnessed  just such an event. My good friend Libby Isaacson, who is my chief operating officer of Residential Properties, was installed as the incoming President of the Greater Providence Board of Realtors at a luncheon held at the club. Her term as President begins in November and will last for a year. In her acceptance speech, she asked the members to become more involved in the activities of the National Association of Realtors (NAR) through their email “Calls to Action,” to take advantage of the upcoming training classes, and to get involved in committees. Knowing Libby, I am sure she will raise the participation level.

But this also got me to thinking why I have her in the operations position. Here’s a little background on her.

Libby is the current Chair of the Professional Standards and Ethics committee. She also Chairs the Professional Standards and Ethics committee of the Rhode Island Association of Realtors where she is also a director on the board. She serves on the Marker Committee of the Providence Preservation Society. She is a commissioner for the city of Providence on the Downcity Design Review Committee. She is President emeritus of the Board of Directors of the Sophia Academy, a small middle school in Providence for girls from low-income Providence families.

When I started this business I focused on getting the best people in the real estate business to join me. That is still what we do.