Now is the right time to buy, check it out!
Great article on why now is the right time to buy! The Lawhead Team would like to share this article from pcmbankers.com.
Click Here to read the entire article: “Top 7 Reasons Why Now Is A Good Time To Buy A House“.
A slow economy offers great opportunities
When you read the news, it may seem that the economy still is not quite back on its feet yet. While the stock market is at record levels and housing prices are rising, many people are still wary over investing in a new property. However, there are some great reasons as to why now is a good time to buy a house.
1. Owning is better than renting
When home prices were plummeting, many owners found themselves “underwater” with their properties falling below their original purchase value. At that time, it made sense to avoid the market and rent rather than buy.
However, market conditions are significantly removed from where they were during the peak of the housing meltdown. With so many people turning to rentals, the supply has not been able to keep up with demand. The basic market fundamentals are pushing up rental prices as a result.
When you consider how much it costs to rent in many areas of the country, it simply makes more sense to buy your own property. In fact, some studies, including one by Trulia.com, show that in the vast majority of regional markets, you will do better paying a monthly mortgage as compared to paying monthly rent.
2. Interest rates are low
The interest rates for mortgages continue to stay at historically low levels. While the Federal Reserve is planning to cut back on its support for such low rates, we should see change occur gradually. What this means is that homebuyers still have time to benefit from rates that are near 50-year lows.
With the housing market beginning to pick up rapidly, rates could climb significantly in the next few years depending on how drastically the Fed rolls back its support. For this reason, smart consumers will see that now is the time to grab an opportunity that they might not see again in their lifetime. The more the economy recovers, the more likely it is that interest rates will rise.
Just a tiny increase in mortgage rates, can cause your monthly payment to rise by a hundred dollars or more in some cases!
Some real estate experts also believe that qualifying for a mortgage may become harder rather than easier in the near future. This may seem difficult to believe given the current tight lending policies, but there are indications that things will get worse.
For example, Fannie Mae and Freddie Mac may be doing less lending in the future forcing consumers to deal with private lenders. If the federal government reduces its backing of the mortgage market, we could see banks and other lenders instituting even stricter lending requirements. Many financial institutions are unable to take on much new risk as they are still dealing with bad debt left over from the last meltdown.
3. Prices are rising or stabilizing
In many regions of the country, home prices have been rising rapidly. While the situation across the nation is still very mixed, in most areas, prices are at least stabilizing. The huge slides we saw during the housing meltdown are likely over, according to most indications.
While some analysts fear that small drops can still occur, most do not think that we will see anything like the sustained damage that started in 2007. Homebuyers can have a good deal of confidence that their investments will remain stable at the least, while in many regions, they can see sharp price gains. To be cautious, you can avoid areas that seem to attract excessive speculation. A recent New York Times article discusses some examples of this trend (http://dealbook.nytimes.com/2013/06/03/behind-the-rise-in-house-prices-wall-street-buyers/).
One sign that property speculation is going on is when home prices are rising much faster than the local growth in personal income. Another thing to watch out for is sellers that are “flipping” homes at a rapid rate in a particular area.
4. Homes are cheap to buy in many areas
While prices are high in hot real estate markets, in many areas you can still find very good bargains available. Some regions are just beginning to come out of the housing crisis, and sellers in these areas are eager to find people to buy.
When the sellers outnumber the buyers, you can expect lower prices. Often, these types of conditions allow you to bargain the purchase down from the original listed price. Do not be afraid to play “hardball” if you really want a good deal.
Be patient and firm, and eager sellers may come around to your offer. Housing is more affordable now than at any time since the early 1990s.
Click Here to read 3 more reasons now is the right time to buy a house.