It’s a Great Time to Buy
Have you ever thought about buying a new home? Now is the time to think about it again! Why? Our economy is strong and growing. Interest rates are still at historic lows. There is a great selection of new homes on the market. All of these reasons coupled with the fact that homeownership is a safe and secure investment for your future are great reasons to buy a home. And don’t forget that home ownership may provide significant tax benefits.
Owning your own home is the American dream. Make your dreams come true today. “It’s a Great Time to Buy a Home.”
Interest Rates
Low Rates, Competitive Prices and Great Opprotunity Await Today’s Home Buyers. Today’s housing market is a different animal completely from the one we saw just a few years back. But with change often comes opportunity, and there’s no exception in this case either. Market economics are creating an excellent environment in which to buy a home. Consider the following advantages for home shoppers today:
Prices have leveled off. In some areas, prices have even declined. Regions that were burning hot in the past have begun to cool and level off, giving the buyer a unique opportunity to find affordable housing that may have been out of reach before. Sellers in this environment—by necessity—are much more prepared to negotiate. While there are no guarantees you’ll get everything you want—bargains are all about give and take—you can be assured that your needs will be heard. Most likely, you can get the house of your dreams and still have a budget leftover for decorating.
Houses are staying on the market longer, meaning more choices for you. Previously, home shoppers had to make an offer immediately if they wanted to get their top choice. Today, there are a wide variety of homes for sale, with a better chance of getting the home that fits your needs, without the super-stiff competition from lots of other buyers as was seen in years past.
Mortgage rates are historically low. Interest rates are still affordable, remaining near 6.5 percent. Looking back, 1984 saw fixed rate mortgage interests as high as 14.75 percent. Even just six years ago, interest rates ranged from 8 to 8.5 percent. A half-percent rate difference on a $200,000 mortgage, from 6.5 percent to 7 percent, translates into an increase in monthly mortgage payments of $66.00. Over a thirty-year mortgage, that’s an extra $23,926! When rates are this attractive, it just doesn’t make sense to try and time the market.
Many builders are offering incentives. Discounted financing packages, value-added incentives, and even first-year mortgage payments are some of the incentives builders are offering, allowing families to get in on the host of benefits that homeownership offers. Home equity, the value of a home minus any mortgage debt, accounts for more than half of the total net wealth of the typical family, making homeownership the primary source of a household’s net worth. This makes owning a home the fundamental first step toward accumulating personal wealth. And don’t forget the great tax benefits as well!
Homeownership is always attractive. Besides being a stepping stone to a future of financial security, homeownership provides a sense of community and personal satisfaction and inspires civic responsibility. Homeowners are more likely to vote and get involved in local issues. Studies show they are also more content with their lives, owing to the spillover benefits from an increased social circle, a stronger sense of belonging and increased activity in community groups.
Homeownership is the cornerstone of the American way of life and the fulfillment of the American Dream. Today’s market allows that dream to be possible for you as well.
Opportunities for First-Time Home Buyers
For many people, buying a first home is a rite of passage. It’s a foot firmly planted in independence and on the path to success, a true part of the American dream. But as many first-time buyers are coming to realize, it’s more than just the end-goal of a journey towards financial independence. Buying a home, particularly your first home, just makes plain good sense, now more than ever.
Potential first-time buyers may be intimidated by today’s changing housing market. Isn’t it just better to “play it safe” and keep renting in case home prices fall? If you buy now, will you be paying too much?
First, these are valid considerations. Even those who have bought and sold many homes ask similar questions. But the truth is that today’s economic environment makes it an excellent time to buy. Interest rates are low by historical standards, there are lots of choices, and sellers are offering incentives.
Perhaps, as a first-time buyer, you want to wait until prices drop lower. Actually, if you continue to wait, you may never be able to afford to get into the housing market. The truth is, even a small uptick in interest rates can wipe out any gains from falling prices.
Consider this example: If you decide to wait to purchase a home, and the price were to drop $10,000 from where it is today, you could still end up losing money. How? If interest rates were to move up a half-a-point during this period, the savings on the reduced home price would be more than offset by the higher monthly payment you would be making over the life of the loan.
Interest rates currently stand at about 6.5 percent and are extremely favorable for buyers. In fact, they are hovering near 30-year lows. But waiting to time the market is a dangerous—and losing—game. Even those who follow the market for a living can’t figure out when interest rates will bottom out. If they could, they would all be multi-millionaires. Because interest rates are near historic lows, it is much more likely that they will head higher in the future as opposed to moving even lower.
Now consider the current rental market. During the past few years, many rental units have been converted to condos, resulting in fewer rentals on the market. Less supply, higher prices. Each year, your rent can easily go up 5 to 10 percent. Where is the economic security in that? When you buy a home, you’re also locking in price stability, knowing that you will pay the same monthly payment for the life of your 30-year fixed-rate mortgage. Plus, renting doesn’t get you the investment or tax benefits of homeownership.
The best way to build household wealth is to own a home. Once you do, you are able to take advantage of generous tax deductions, and your equity begins to build. Your home will appreciate in value over the years, and eventually you can use those gains to sell your starter home and afford to move into a bigger house. Remember, it’s called a starter home for a reason. With so many homes on the market to choose from, your best strategy may be to scale back expectations for your dream home. After a few years, you will be able to leverage this investment and buy a larger house.
The truth is, buying your first home just makes good sense. Housing is always a smart investment, and it is by far is the best way to use a small amount of money for a big return. Interest rates are historically low and the selection of homes on the market is plentiful. Do your research and you’ll come to this very conclusion—in today’s market, the real risk isn’t in buying a home, it’s sitting on the fence.
