Your New Home Partners
As the new housing market continues to show more signs of health and improved conditions, you might be thinking more seriously about purchasing a home.
Here are some reasons why it’s currently a good idea to get off the fence — sooner, rather than later.
Mortgage rates are still low
During the recession, the rate on the 30-year, fixed-rate loan averaged 4.32 percent. Now, rates are close to that, and there’s no recession! That means they’ve got nowhere to go but up — particularly because the Federal Reserve is expected to end its bond-buying program, which has been credited with pushing mortgage rates to historic lows.
Granted, rates aren’t expected to skyrocket overnight, but don’t think that a small uptick wouldn’t affect your budget. In fact, if rates were to go up by just 1 percentage point, your purchasing power would be reduced by a whopping 11 percent. To put this in further perspective: If you could afford a $400,000 loan at 4 percent mortgage rates, you could afford a loan of just $356,000 at 5 percent.
Home prices are still affordable
While home prices, nationally, continue to rise, up nearly 5.5 percent in 2018, that trend will simply continue to raise . And get this: Home buying is more affordable now than ever before. According to a recent analysis, U.S. home buyers are spending around 20-22 percent of income devoted to mortgages. This situation won’t last forever, especially as mortgage rates continue to rise.
Buying is still cheaper than renting
No doubt, buying a house is a significant purchase, but in a majority of the country, it’s still cheaper than renting. In fact, in half of metros in the U.S., buying beats renting after only two years. This can be attributed to historically high rental prices that have helped skew the rent vs. buy decision toward buying for those who can afford it. So if you can afford to buy, now is the time as rents aren’t getting any cheaper!
Additionally, many new home developers offer help in getting credit scores up higher to quality for better loans. Don't you think it's time to jump off the fence?
Randy Doell Realtor®
New 🏡Construction Specialist
Berkshire Hathaway HomeServices FLPG
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For New Home Construction Questions Call 813-715-2859