6 Reasons To Buy A Home This Summer
To buy or to wait. This is the question. Here are 6 reasons to buy a home. The cost of waiting is high.
1. Prices Will Continue to Rise
CoreLogic’s latest Home Price Index reports that home prices have appreciated by 7.0% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.2% over the next year.
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting to buy a home no longer makes sense.
2. Mortgage Interest Rates Are Projected to Increase
Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have already increased by half of a percentage point, to around 4.5%, in 2018. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison, projecting that rates will increase by half a percentage point by this time next year.
An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.
3. Either Way, You Are Paying a Mortgage
There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.
As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.
Are you ready to put your housing cost to work for you?
4. Buy a home for a fixed mortgage payment. Rents continue to rise!
The Census Bureau recently released their 2017 third-quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:
As you can see, rents have steadily increased and are showing no signs of slowing down. If you are deciding if you should rent or buy your next home, take this into consideration.
Even with the tax law changes, buying a home is the most fundamental way to build wealth in America. “Homeowners are worth forty times more than renters” according to David Bach, co-founder of AE Wealth Management and self-made millionaire.
When you pay rent, you are building your landlord’s equity and affording he or she the tax benefits, too. Why do that unless you need to? As a boomer, your home can be easily willed to your spouse or your heirs who can elect favorable tax consequences if they decide to sell it. Another option is to rent the home and reap the benefits of a valuable income property.
5. Buy a home and build emotional wealth
Our lives are made rich by living as our authentic selves. Having space to truly relax and make your own builds self-esteem and the happiness factor. Not everything comes down to money, although good economic choices are still very important. Putting down roots and knowing one’s neighbors and building lasting relationships is part of building an emotional support system
6. It’s Time to Move on with Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.
But what if they weren’t? Would you wait?
Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.
If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings. Let’s get together so we can help you decide what the best step is for you and your family!