So you've been careful with your money all these years and have always saved some for a rainy day? Good for you! Even when the economy is bad, those who plan ahead and take advantage of market conditions can make money from it. Even mortgages can benefit from a bad economy because rates tend to go down when bad news comes out about the economy. How does this help you as a smart customer? All you have to do is follow the numbers!
Weak economic data usually means that people are spending less and are worried about their jobs and other money issues. Because of this, the mortgage market usually sees less demand for mortgages and lower interest rates. People who have been putting off buying a house for a while and have great credit may find that they can get more house for less money and a great rate during these economic downturns.
Mortgage rates change often from week to week, so it always pays to stay on top of them. If you are thinking about getting a new mortgage, you should pay attention to inflationary data because it could cause the rate to go up. When data show that inflation is going up, mortgage rates tend to go up as well. After all, when inflation is taken into account, the value of a dollar goes down. If you want to buy a house, you could save up to half a percentage point just by knowing when the Fed releases inflation data and locking in your rate before then if you think the data will show inflation is going up.
Like the stock market, the best time to buy real estate is when the market is down. This is also true for people who want to buy a new home. The price of a house that was out of your price range could drop by tens of thousands of dollars all of a sudden. When you add that to an interest rate that is half a point to a point lower than you thought it would be, you may find that a house you thought you couldn't afford is actually a good fit for your budget.
The economy goes up and down, but over time, most things, including housing, get back to normal. By planning your real estate purchase and keeping your credit in good shape, you can set yourself up to take advantage of economic downturns and come out of them financially better than you thought possible.
Use the fact that it's a buyer's market to your advantage.
