Should We Buy Or Rent A Home In 2011?
Karen and I have been in the real estate business and learned long before this debacle occurred in 2006 that it is in the buyer's interest to have loan approval before viewing any property
It is only mid-January and I have been asked that question several times already. Well, consider the following before you decide.
I have only highlighted the most obvious benefits of home ownership in 2011. Please call me at 703-881-4404 for an appointment to meet and discuss any other questions and your requirements.
- Beginning in 2000 lending policies were relaxed to the point that many people were able to buy homes that would have normally rented a home. As you can imagine, housing prices spiralled upward and with no justification other than everyone was allowed to buy a home and a bidding frenzy took place.
- Common sense and simple math proved this could not continue and about mid-2006 the housing market stalled and came crashing down with millions of people unable to meet their mortgage commitment. Just as housing prices escalated by as much as 50 to 60% they have dropped to Year 2000 levels.
- Mortgage interest rates are at record low levels. Homes can still be purchased with as little as 3.5 % down using FHA financing or no money down for active duty military personnel or veterans using VA financing if you qualify.
- Many people who do not have to sell their home are not putting them on the market at this time. The result is there is an inventory shortage in the Northen Virginia area.
- Whenever there is an inventory shortage rental prices increase. It is a pure and simple case of supply and demand.
- I believe when we run a "rent versus buy" analysis the combination of currently low interest rates and home prices the "before tax" comparison could quite possibly show it to be more favorable to purchase a home
- Other than the current tax breaks for home ownership there is the obvious benefit of increasing value of your investment as home prices begin to return to normal growth levels. Additionally, interest rates will increase and reduce the amount of home you can purchase with a comfortable payment.
- If you purchase with a fixed rate loan the only payment increases that will occur while you own the home are real estate taxes and the cost of insurance.
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