(Hint: the answer is not what you think)
Home prices are at an all-time high as are mortgage interest rates. As anyone in the industry can tell you, this is fertile ground for a seller’s market – which is exactly what is going on: these are prime conditions in which to be a seller.
So most would think, and might well advise, you not to think about buying your first home at this time. But they may very well be wrong. Why? Well – here are three reasons why, despite it being a seller’s market, this may be the right time to become a first time home buyer.
1. While home values are at all an all-time high, we’ve seen this dog and pony show before. Back in 2006, many argued that home values were inflated and what goes up must come down. And while it is true that the values of homes dropped during the Great Recession of 2008, as expected, the housing market rebounded and home values have not only have restored to the values of 2006, but have exceeded far beyond. So although home values right now may seem overly inflated, a home is a long-term investment. As such, with the way the real estate market trends, home values may drop in the event of another recession. But trust, they more than likely would continue to follow an upward trajectory far surpassing where they are even right now. So in 10 to 15 years, the home you buy now will most likely be significantly greater in value than it is at the current time.. So in 10 to 15 years, the home you buy now will likely be $100,000 greater in value than it is at the current time. The investment you make now will likely pay dividends in the near future while also providing you with a stable environment that you and your family can call home for years and even generations to come.
2. There is no doubt about it – mortgage interest rates are sky high compared to a few years ago. And it doesn’t look like the Federal Reserve will be bringing them down anytime soon. But here is the thing: even thought they are high now, if interest rates continue to rise then the time to buy is now before they creep up any higher. Even better, when and if mortgage interest rates drop and you find yourself locked into a high interest rate, that’s what refinancing is for. If interest rates drop to 3%, you can always refinance your 6% interest rate and take advantage of the more attractive lower interest rates on your home without skipping a beat.
3. While it is also true that we are in a Seller’s market, it isn’t the Super Sellers Market that it once was a short time ago. A prospective buyer has far less competition from other prospective buyers as he or she did in the market even just several months back. This may prove key in landing the deal that you want for the home you desire.
So should you buy now? If you are ready, willing and able to become a homeowner, the answer to that question is indubitably yes. Because at the end of the day, if you are properly prepared, the financials will all work out. But nothing beats coming home at the end of a long day, closing your door to the outside world and feeling safe and secure in your dream home.
Andrew S. Roth, Esq. &
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