It’s true that buying that first home is a major investment, in money, in time and in energy. A first time home buyer may have concerns regarding their credit worthiness, the amount of money required for a down payment and how debt such as school loans will impact how much home they can buy. As a result they may continue to rent rather than pursuing home ownership. However, whatever the reasons, there is also a cost to choosing not to buy that first home and continuing to rent. Here are 5 reasons why you shouldn’t wait!
Reasons to Buy Now
- Interest Rates – There probably will never be a better time to buy based on interest rates. However that scenario will not continue indefinitely. Rates will be going up. Think about the numbers. In 2008 interest rates were at 8%. Today interest rates are at or below 4%. How many dollars does that translate into? It means that a buyer who could afford a mortgage loan for a home around $245,000 at the higher 8% interest rate could afford $375,000 at today’s low interest rates. That is a compelling reason to buy a home while the interest rates are still low.
- Home Prices – Home prices have been increasing. Combined with lower interest rates this means now is a great time to buy. Both interest rates and home prices will go up in the future. Demand for homes is high, especially in cities such as Charlotte which are growing and expanding. While demand is high the real estate market will remain strong and home prices will increase. Buying now means you will begin growing equity right away.
- Renting is Expensive – If you have been renting, or have looked at rental rates lately, then you know that renting a home or apartment is going to cost you! In many markets, including Charlotte and the Lake Norman communities, it is more expensive to rent than to buy. If you would like to figure out the numbers for yourself look at this article we wrote which explains how to use the price to rent ratio.
- Housing Inventory – As the market stabilizes homeowners who were holding off on selling their homes have started to list their homes for sale. As more homes – and less foreclosures – become available, buyers are able to find homes in the location, with the amenities and features they want.
- Stable Employment – Living in a city that is growing means that today’s buyers are very likely to be in stable employment. This means they can move forward with plans to purchase a home knowing they will be able to handle a long term mortgage payment.
Diane and William Kradel