We mentioned in yesterday’s blog that interest rates will be staying lower, and it’s still cheaper to own than to rent.
So in today’s blog, we’re pulling out the sledgehammer to give you a nudge if you’re on the fence: This last quarter is a great time to buy a home before 2014.
There had been concerns that the feds would tighten requirements for home loans, but that hasn’t happened yet. Many banks and credit unions have easier criteria to help some people get that home loan they’ve been wanting. If you have good credit and some savings for a down payment, you probably can get your own home. If you stay in your home at least five years, you could profit from the sale.
Home prices aren’t at rock bottom anymore, but they are still relatively low. And they will continue to rise. The Home Price Expectation Survey projects an increase in home values over the next five years to be between 12.3% and 32.8%. If you wait longer, the house will cost more.
There is less competition from home flippers. Investors can’t move as quickly now as they used to coupled with increasing housing prices are making house flipping less attractive. That gives you more inventory. And as we also mentioned, home builders are still building new homes to also increase the inventory.
MSN Real Estate reported that builders are offering aggressive discounts with completed new homes. The nice thing about a new home is you get a warranty not only on the home, but also the appliances.
“[Builders] want to save their credit, save their brand, save their reputation and clear out inventory,” he said. “They can go buy cheap land today with that cash.”
Did we mention it’s cheaper to buy than to rent in most areas? You also get the mortgage interest deduction which isn’t going away any time soon. Plus instead of putting money into savings, you’re building up equity in your home. And you’re avoiding the cost of rising rents. How many of us have met people who had their rents increased recently because the landlords felt they could?
Interest rates aren’t at their lowest, but they are still relatively low. Unfortunately, they could start increasing again.
As reported by Freddie Mac, interest rates for 30-year fixed-rate mortgages have risen about one full percentage point over recent historic lows.
The National Association of Realtors, the Mortgage Bankers Association, Freddie Macand Fannie Mae, in their July forecasts, have all projected 30-year-fixed mortgage interest rates to be between 4.8 and 5.1% by this time next year.
One percent could mean the difference in the amount of house you can afford.
There’s still time to get your credit in order. Talk to a reputable loan officer about what your options could be and how much you could afford. It’s still a solid investment if you’re intending on living there for a few years.