Government shut down. Debt ceiling. Housing prices. Interest rates. We hear about it every day. The doom and gloom on every newscast about the dire situation of the American financial system is everywhere, and for good reason. 2013 has not been a friend to the American economy…or any economy for that matter. The economic hole in which our country finds itself is deep and wide, and it’s going to take more than a little belt-tightening to get out of it.
In that climate, is NOW really the time to buy a home? I’m going to go out on a limb and say, “YES!” Now is the perfect time to buy a house. Whether wading into the real estate market to buy your first home or diving into the deep end to make a larger investment, real estate has been and continues to be potentially the largest and most stable investment an individual can make in his or her lifetime. Even when the seas seem rocky. Here are two great reasons to consider buying a home now:
1. Interest rates will probably never be lower. One economic factor that is soon to come is that interest rates are going to rise as the debt ceiling continues to be an issue. The sooner you can get approved for a loan and lock in your mortgage rate, the lower it will be. Generally, you can lock in your rate for at least 45-60 days while you look for the property that you want to purchase. Settlement won’t have to happen for close to two months, by which point the government should be running smoothly. Any concerns with approvals, FHA issues and other government-based programs should be a thing of the past. Act now to lock in that rate—or you may regret it for years to come. At today’s current interest rates, a $150,000 mortgage will give you a payment of roughly $950/month. An increase of only half a percent will raise that monthly payment to over $1000/month. After 30 years, you will have paid an additional $18,000+! (As a side note, if you aren't looking to buy, you may want to think about refinanciang!)
2. Homes are beginning to regain their value. Much of what we have heard in the news has been about houses that are “underwater,” or “upside down” on their mortgages. That means homeowner owes more on the house than its current market value. This has been one of the largest causes for the downturn in the real estate market in the last five years. However, a recent study by RealtyTrac, one of the leading suppliers of U.S. real estate data, indicates that the trend is beginning to shift. Within the next 15 months, RealtyTrac predicts that “8.3 million homeowners on the fence with little or no equity are on track to regain enough equity to sell before 2015.” (realtytrac.com) The implications of this trend are twofold. First, housing prices will continue to rise (thereby making that adorable little home in the neighborhood down the street more expensive next year that it is now). Secondly, as homes regain their value, an investment made today will reap more benefits in the future.
While there is never a crystal ball that can guarantee what the future holds, all indications point to the housing market being on the upswing. What better time to contact McGavisk Realty to help you find Your Road Home?
Article Cited:
RealtyTrac Staff. "RealtyTrac U.S. Home Equity & Underwater Report." 3 Sept. 2013 http://www.realtytrac.com/Content/foreclosure-market-report/realtytrac-us-home-equity-and-underwater-report-7852
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