Here are three great reasons to consider buying a home today instead of waiting.
1.) Prices Will Continue to Rise
Standard & Poors recently upgraded their 2013 forecast for the S&P/Case-Shiller Home Price Index to an 11% year-over-year increase from their original 8% projection.
The Home Price Expectation Survey, which polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts, projects a 22.3% appreciation in home values over the next five years. The bottom in home prices has passed. Waiting no longer makes sense.
2.) Mortgage Interest Rates Are Increasing
As reported by Freddie Mac, interest rates for 30-year fixed-rate mortgages have risen about 1/2 percentage point over the past several weeks.
The National Association of Realtors, the Mortgage Bankers Association andFannie Mae are calling for interest rates to rise by approximately an additional ½ percentage point by this time next year. Some are trying to minimize the impact of higher rates. For example, Freddie Mac in their June U.S. Economic and Housing Market Outlook stated:
However, an increase in rates will impact YOUR monthly mortgage payment. Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.
3.) It’s Time to Move On with Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait?
Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.
If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.
By: KCM Crew with KCM Blog
The real estate community is often criticized for always seeming to have a Pollyanna attitude about the housing market. Many believe that the industry’s current call ‘to buy now’ is nothing more than a scare tactic with the sole purpose of creating more commissions for the industry. Let’s take a look at whether or not that advice was good advice over the last year.
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. According to the most recent Case-Shiller Home Pricing Index, home values have risen over 10% in the last year. If we look at Freddie Mac’s Weekly Primary Mortgage Market Survey®, the 30 year mortgage rate has increased from 3.67% to 3.91% during that same period.
The table below compares the cost of the same exact house over the last twelve months:
We can see that the advice to buy a year ago made complete financial sense.
What About Moving Forward?
Most experts are not only calling for prices to continue to rise but are also upgrading their projections as the housing market is showing strong signs of recovering.
Regarding interest rates, the 30 year mortgage rate has soared by over a half point already this year and many believe that the increases will continue. Even those trying to be the voice of reason on this issue are projecting higher rates. For example, Polyana da Costa, senior mortgage analyst at Bankrate.com said:
“Rates are unlikely to keep going up so quickly and should remain below 5 percent.”
The next time a real estate professional says that now is the time to buy they may not be giving you a ‘sales pitch’. They may be giving you nothing but excellent advice.
By: KCM Crew with KCM Blog