1. Prices Will Continue to Rise
The Home Price Expectation Survey polls a distinguished panel of over
100 economists, investment strategists, and housing market analysts.
Their most recent report released recently projects appreciation in home
values over the next five years to be between
11.2% (most pessimistic) and
27.8% (most optimistic).
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
2. Mortgage Interest Rates Are Projected to Increase
Although Freddie Mac’s Primary Mortgage Market Survey shows that
interest rates for a 30-year mortgage have softened recently, most
experts predict that they will begin to rise later this year. The
Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National
Association of Realtors are in unison projecting that rates will be up
almost a full percentage point by the end of next year.
An increase in rates will impact YOUR monthly mortgage payment. Your
housing expense will be more a year from now if a mortgage is necessary
to purchase your next home.
3. Either Way You are Paying a Mortgage
As a recent paper from the Joint Center for Housing Studies at
Harvard University explains: “Households must consume housing whether
they own or rent. Not even accounting for more favorable tax treatment
of owning, homeowners pay debt service to pay down their own principal
while households that rent pay down the principal of a landlord plus a
rate of return. That’s yet another reason owning often does—as Americans
intuit—end up making more financial sense than renting.”
4. 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.
Bottom Line
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.
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