3 Powerful Reasons to Buy a Home Now
Whether you are a first-time buyer or looking to move up to thehome of your dreams, now is a great time to purchase a home. Hereare three major reasons to buy today.
1. Affordability
Many people focus solely on price when talking about homeaffordability. Since home prices have appreciated throughout thepast year, they assume homes are less affordable. However,affordability is determined by three components:
- Price
- Wages
- Mortgage Interest Rate
Prices are up, but so are wages - and interest rates haverecently dropped dramatically (see #2 below). As a result,the National Association ofRealtors’ (NAR) latest Affordability Index report revealedthat homes are MORE affordable throughout the country today thanthey were a year ago.
“All four regions saw an increase in affordabilityfrom a year ago. The South had the biggest gain in affordability of6.9%, followed by the West with a gain of 6.0%. The Midwest had anincrease of 5.8%, followed by the Northeast with the smallest gainof 1.8%.”
2. Mortgage Interest Rates
Mortgage rates have dropped almost a full point after headingtoward 5% last fall and early winter. Currently, they are below4%.
Additionally, FannieMae recently predicted the average rate for a 30-year fixedmortgage will be 3.7% in the second half of 2019. That compares toa 4.4% average rate in the first quarter and 4% in the secondquarter.
With mortgage rates remaining near historiclows, Fannie Mae and others have increased their forecasts for housingappreciation for the rest of the year. If home price gains areabout to re-accelerate, buying now rather than later makesfinancial sense.
3. Increase Family Wealth
Homeownership has always been recognized as a sensational way tobuild long-term family wealth. A newreport by ATTOM DataSolutions reveals:
“U.S. homeowners who sold in the second quarter of2019 realized an average home price gain since purchase of $67,500,up from an average gain of $57,706 in Q1 2019 and up from anaverage gain of $60,100 in Q2 2018. The average home seller gain of$67,500 in Q2 2019 represented an average 33.9 percent return as apercentage of original purchase price.”
The longer you delay purchasing a home, the longer you arewaiting to put the power of home equity to work for you.
Bottom Line
With affordability increasing, mortgage rates decreasing, andhome values about to re-accelerate, it may be time to make a move.Let’s get together to determine if buying now makes sense foryour family.