Based on increasing home prices, fluctuating mortgage rates, increased population and soaring rents, there may never be a better time in real estate to purchase a home or condo than right now. Here are five major reasons purchasers should consider buying now.
1. Competition is about to Increase for the best home or condo available in the best location at the best price.
Every Spring a huge surge of prospective purchasers enter the housing market. All these potential home buyers will want the best home available in the best location and at the best price. They will be competing for the “steals and the deals” in the market. Missing any opportunity to get that “once-in-a-lifetime deal today” that “will no longer will be available tomorrow” will only increase as the market heats up.
2. Price Increases Are on the Horizon
In Florida homes prices appreciated 6%, and nationally, home prices on average, appreciated by 5 % in 2014. For first time home buyers, it will most likely cost them more both in price and in interest rate if they continue to wait on the sidelines. First time buyers need patience and guidance to better understand the real estate inventory available to them and the long term benefits of home ownership. For move-up buyers, it will wind-up costing them more in real dollars as the home they want to buy will appreciate at approximately the same rate as the house they own now, especially if they own a smaller “starter” home and they want a bigger “family” home.
3. Owning a Home Helps Create Family Wealth
Upfront, the decision is whether to be a landlord or live in the home. In either case, most likely, a mortgage is required. The benefits of being a landlord are that the tenants pay the mortgage when they pay their rent. And the benefit of not being a landlord, and paying the mortgage by oneself, is the pride and joy that comes with maintaining a valuable piece of appreciating property. The Federal Reserve, in a recent study, revealed that the net worth of the average homeowner is 30 times greater than that of a renter.
4. Interest Rates Are Projected to Rise
The Mortgage Bankers Association, the National Association of Realtors, Freddie Mac and Fannie Mae have all projected that the 30-year mortgage interest rate will sit comfortably in the 4% range by the spring of 2015. That is an increase of almost .500% of a point over current rates. That’s a difference of over $30 for every $100,000 borrowed.
5. Buy Low, Sell High
The benefits of owning real estate come down to long term capital appreciation. Most would all agree that when buying, “buy at the lowest possible price and sell at the highest possible price”. Housing can create family wealth as long as this simple principle is followed. Today’s real estate market is selling at relatively low prices compared to where it will be next year and the year after that. So, now really is the time to buy.