To buy or not to buy . . . That is the question of the day. And the month. And the year.
Being a first-time home buyer is tough these days. First of all, there's the natural reservations about taking "the plunge" into homeownership. For most people, it's the biggest investment of their lives. And, of course, there's the fact that homeownership is usually a long-term commitment. People are understandably nervous about entering into a complicated transaction with long-term financial ramifications. On top of that, the media is full of stories about foreclosures, mortgage meltdowns, and declining home values.
So why would anyone want to enter the housing market right now?
- Because you've gotta live somewhere.
- Because you can paint your walls chartreuse if you want.
- Because real estate has been and will continue to be a terrific long-term investment.
- Because housing booms actually rarely end in housing busts. It takes major economic problems and job losses to bring about that type of decline.
- Because "saving up until home prices come back down" may not work. That excuse could backfire and end up wasting a potential buyer valuable time and money. What if prices start back up? If a $300,000 home appreciated 5% over the next year, a potential buyer would have to put away an extra $15K after taxes to compensate for that increase. What if interest rates rise? Could they afford to buy then? What if underwriting guidelines get even stricter? Could they qualify?
To buy or not to buy. Yes, I'm a realtor, so I like it when people are buying houses. But I truly know that homeownership has rewards that most people aspire to. And homeownership has been proven to be the best way to build wealth and security. I hope that those who have been afraid to take the plunge can get past their fears and see that they can't afford not to take advantage of the current state of the market. Go on! You'll be glad you did!
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