The task of buying a home is a daunting prospect for many buyers. It is nearly always the most expensive purchase you will ever make.
However, with the cost of homes reaching record lows in recent years, now is an excellent time to purchase. Low sale prices won’t last forever. In fact, recent economic trends suggest that house prices may rise significantly in the next few months, meaning now is the time to buy.
Since 2007, the average price of a home on the market has dropped a staggering 30 percent. In some bigger cities where the economic downturn had the largest impact, the cost of a new home dropped closer to 45 percent.
Prices this low don’t come around that often and they could reverse at any moment. In some parts of the country, they already have. So here’s five reasons you might want to buy right away.
1. Inflation could occur
In the coming years the Federal Reserve will likely make adjustments that will cause the inflation of prices of just about everything, and that includes the price of houses. Since the economic downturn of 2008, the Fed’s methods of boosting the economy has resulted in tripling the country’s money supply. This means that the dollar is likely to lose up to two-thirds of its value before long, meaning prices on everything will rise to help recover the loss.
2. Renting costs more than buying
Many renters are now paying a significant amount more per month for housing than buyers. Americans are wasting what could have been a significant down payment on a new home. Why give money to someone else and get nothing in return every month when it’s more cost-effective to purchase your own home?
3. Mortgage interest rates are low
Mortgage interest rates are at an all-time low. In fact, in some part of the US they are lower than they have been in more than two decades. Applying for a mortgage with a lower interest rate means you can afford more house for less money, and you will save hundreds of thousands of dollars over the life of your loan.
As rates rise, the cost of owning a home increases. This could mean you have to settle for a smaller home, or one that is located further away from your ideal neighborhood.
4. Tax benefits
There was talk of reducing or eliminating the mortgage interest deduction on federal income tax returns, but that scenario is unlikely. The benefits you receive for itemizing deductions as a homeowner reduce your tax liability.
Lowering your taxes could net you a slightly higher monthly income or an income tax refund each year.
5. Finding a great mortgage
With mortgage rates at the lowest they’ve been in decades, finding a great home loan is easier than ever. Provided you have the credit to qualify for a mortgage, shopping around for the best rate is simple.
Most banks offer competitive rates, which means it won’t take you long to find the one with the best terms and the most benefits. The faster you become qualified, the faster you can purchase a home and start saving money on rent and taxes.
The growing number of reasons to purchase a home are compelling. If you are looking to live in your new home for at least a decade, chances are good that your investment will be solid.
Real estate trends predict the housing market will rise over the course of the coming decade. The number of homes on the market plus the comparatively low number of prospective buyers have combined to create a buyer’s market. For you, this means more homes to choose from at lower prices.