Let’s be honest, many potential and qualified home buyers are not presently shopping for a single family home. They seem to be content with non-home ownership. Renting, as some of them say allows for more freedom. They saw what happened to their parents or friends by getting into a situation they could not easily get out of. (i.e., underwater property, foreclosure) And they don’t like what they’ve seen.

     Tough to argue with that one. But make no mistake, there is a downside risk for buyers not buying at this time, and quite honestly, many buyers may regret that they have not acted. Here are some risks:

1)    Government Action: I’ll give you one real world example of a consequence for buyers who could have bought 6 months or a year ago and didn’t because the government adjusted downwards the maximum loan amount that would be loaned on an FHA in Maricopa County from $346,250.00 to $271,050. Now many can’t buy in a neighborhood they can afford because of needing a substantially greater down payment. (FHA will provide funding with just 3.5% cash down payment which means that a buyer could have bought a $355,000 home with a lot less cash than is required now with conventional financing. (i.e., 10% to 20% cash down)

2)    Home Values Moving Up: The local market bottomed out during the fall of 2011. For 24 straight months, prices increased and have now leveled off. Have they stopped increasing? Well, it’s a risk, but consider that our market is still almost 30% below the peak we reached back in December 2008.

3)    Further Mortgage Rate Increases: One year ago, mortgage rates were in the mid 3% range. Today they are averaging between 4.25% and 4.5%. Nuff said.

4)    Selection of Homes Could Decrease: Right now there’s a healthy assortment of homes for sale. If sales begin to increase, inventory of available homes will fall, thereby decreasing buyer choice.

5)    Rents Moving Up: Landlords are happy with this one. With so many renters, the demand for rentals has increased, thereby increasing average rents.