Get Off The Fence: The Time To Buy Is Now
Most buyers like to wait for the absolute perfect time to buy. They want the highest inventory, lowest demand, best rates and quickest turnaround. As any buyer knows, getting all of these may not be very realistic. While it is cliché to say that there is no time to buy like the present, in this case it may actually be true. There are a few important factors that make the next 30 days a good window to purchase a home. It is one of the rare times where you may be able to get everything you want as a buyer. Here are four reasons why now is a great time to buy a home.
- Low Interest Rates. Low interest rates alone should not be a reason you purchase a home. However if you have been on the fence it should give you a little push. Low interest rates allow you to get more home for your money. A loan amount of $300,000 with an interest rate of 4% yields a principal and interest payment of $1432/month. That same payment with a rate of 5% shoots up to $1610 a month. The higher the loan amount the less change in rate that is needed to negatively impact the payment. Interest rates have slowly been edging up over the last thirty days. With a change of leadership and policies rates may continue the upward climb. There is no way to confidently predict where interest rates will go but all of the signs indicate that they may be heading higher.
- Changing Programs. Over the past year there has been a steady increase of purchase programs to the market. Many of these programs are aimed at borrowers with limited down payment. With the appointment of Ben Carson as the secretary of HUD, these may not be around for too long. Carson has been quoted as saying that he is against low income housing. What will happen to low down payment FHA programs will be determined but if you fit this borrower profile you may want to lock into a program before they go away.
- Rent Increases. Rising interest rates usually mean rising rents. While they have no direct correlation they are often lumped together. It is a simple case of following the market. If housing payments are on the rise the increase is typically passed along to tenants. Unless you are locked into a long term lease the payment you have today may not be in place for too much longer. If this is the case your money would be better spent on housing than by renting.
- Reduced Supply and Demand. The next thirty days is often a down time in the real estate world. Few sellers like listing their home around the holidays and the New Year. This leads to decreased supply which benefits buyers. By starting your home search now you may be able to take advantage of the inventory in your market. There are many sellers who don’t want to wait until the spring market to get rid of their homes. With the right offer you may be able to get the property at a discount on a home you really want. The low price coupled with low interest rates and minimal down payment can help you lock into an affordable monthly payment for years to come.
Big things are in store for the real estate market in 2017. There is expected to be plenty of changes in rates and programs. If you have been on the fence, the time to buy may be now.