It doesn’t matter whether you are a first time home-buyer or looking to move up to the home of your dreams, now is a great time to purchase a home. Here are three major reasons to buy today.
1. It’s more affordable today
Many people focus solely on price when talking about home affordability. Since home prices have appreciated throughout the past year, they assume homes are less affordable. However, affordability is determined by three components:
- Mortgage Interest Rate
Prices are up, but so are wages – and interest rates have recently dropped dramatically (see #2 below). As a result, the National Association of Realtors’ (NAR) latest Affordability Index report revealed that homes are MORE affordable throughout the country today than they were a year ago.
“All four regions saw an increase in affordability from a year ago. The South had the biggest gain in affordability of 6.9%, followed by the West with a gain of 6.0%. The Midwest had an increase of 5.8%, followed by the Northeast with the smallest gain of 1.8%.”
2. Mortgage Interest Rates are near a two year low
I have heard of 30 year fixed loans with 3.25% interest rates. Many builders are offering major incentives with as much as $15,000 towards upgrades or money that you can use to buy down your rate. Mortgage rates have dropped almost a full point after heading toward 5% last fall and early winter.
With mortgage rates remaining near historic lows, Fannie Mae and others have increased their forecasts for housing appreciation for the rest of the year. If home price gains are about to re-accelerate, buying now rather than later makes financial sense.
3. It’s about building wealth.
Homeownership has always been recognized as a sensational way to build long-term family wealth. A new report by ATTOM Data Solutions reveals:
“U.S. homeowners who sold in the second quarter of 2019 realized an average home price gain since purchase of $67,500, up from an average gain of $57,706 in Q1 2019 and up from an average gain of $60,100 in Q2 2018. The average home seller gain of $67,500 in Q2 2019 represented an average 33.9 percent return as a percentage of original purchase price.”
The longer you delay purchasing a home, the longer you are waiting to put the power of home equity to work for you.
Work your plan and pay your mortgage off. Almost 40% of US homes are debt free
With affordability increasing, mortgage rates decreasing, and home values about to re-accelerate, it may be time to talk with a local real estate professional to determine if buying now makes sense for your family.