The reasons to buy a home before 2014 include everything from rising mortgage interest rates and home prices, to falling affordability indexes, rising interest rates, and the fear of inflation.
Reason #1: Interest Rates Will Rise
One problem with historically low mortgage interest rates is that they have nowhere to go but up. We have seen some stability; however the prediction is that rates will begin to rise.
Reason #2: Homes Are Still Affordable but are Rising
Housing price trends vary significantly by location and even by neighborhood, but the average housing prices trends across the country look promising for prospective homebuyers. However, they will continue to rise. The Home Price Expectation Survey projects an increase in home values over the next five years to be between 12.3% and 32.8%. If you wait longer, chances are that your home will cost more.
Reason #3: It May be Easier to get a Mortgage
Credit Unions and banks are making it easier for some prospective buyers to qualify for a mortgage. The average rate for a 30-year fixed loan is 4.50 percent. While this is a 1.15 percent increase from the historic low of 3.35 percent at the end of 2012, it’s still an attractive rate for prospective homebuyers. The housing sector is getting stronger and inflation rates are low. This is a great combination.
Reason #4: Avoid the Cost of Rising Rent
If you live in a metropolitan area, it may make more financial sense to buy a home than rent a house, condo or apartment. A buyer’s market means it might be time to say goodbye to renting for good. If you’re tired of rent increases at your current location or want to move but ill experience a spike in rent, consider the benefits of buying a home instead. You may be able to secure a great rate and end up paying the equivalent or less in monthly payments as you build equity in a home. Renting can be a more affordable option for the short term, but renters still have to face rising rental costs year after year. Check out Trulia’s rent vs. buy calculator to find out what’s better for you.
Reason #5: Invest in Your Future
Buying a home gives you a chance to start building equity, and you are investing in your future. Even if you end up selling your home in five or ten years, you could profit from the sale and invest that money somewhere else. If you’ve been dealing with rising rent or the hassles of costly moves for the past few years, settling into a home can stabilize your housing expenses – especially if you get a fixed-rate loan at a great rate. You won’t have to worry about your monthly housing expenses changing significantly for a few years, and you will pay for something that has more value than a rental property. Consider the benefits of making this type of contribution to your future month after month.
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