Last week Fannie Mae released their monthly Home Purchase Sentiment Index which found that only 18% of consumers believe now is a good time to buy a home. Second, 41% of consumers believe home prices will increase this next year and only 24% believe home prices will drop. Third, a whopping 83% of consumers believe mortgage rates will remain the same or increase over the next year.
Why do consumers believe home prices and mortgage rates will both rise over the next year but yet they say now is not a good time to buy a home? I believe the question “Is now a good time to buy a home?” is much more emotional than the 2 other questions and remember we as human beings nearly always make decisions using our emotions and then we look for facts to support our emotions. And that fact is 82% believe or feel like I do thus my emotions are correct.
But, NOW is the time to buy when so few people think it’s a good time to buy. This is why Warren Buffett says and practices, “I buy when others are selling and I sell when others are buying.” This is why he is one of the richest men in the world. So, consumers if you want to be like Warren you need to act like Warren.