If you’ve been waiting for the right time to buy a home, that time might now. Current economic reports are holding true to previous predictions: things are getting better. The economy is stabilizing, the housing market is firming up, and consumer confidence is on the rise. If home buying is in your future plans, your future is ready to start.
The most compelling reason to buy now is, as always, the bottom line: money. Rents are on the rise, while home prices are bottomed out. Housing experts describe current home prices as below ‘fair value’ – that means they have dropped below what the home is actually worth today. For many potential buyers, buying is cheaper than renting, maybe even significantly so. Reports indicate that home prices are on average 10% below the price of rents in monthly expenditures; people are paying less on mortgages than rent. Buying not only may save money each month, but buyers investing in an undervalued property can expect to see strong, if gradual, gains in home values (and increased equity) through the next few years.
The job market is picking up. The past months have posted better than expected employment numbers, dropping the unemployment rate and boosting consumer confidence. A stronger economy means better financial stability, and formerly uncertain potential homebuyers are beginning to feel secure enough to buy. Banks are also feeling more secure, and with historically low mortgage rates, the lending climate is becoming more inviting than ever.
Many potential homebuyers have been waiting for a sign to begin: this could be it. Already buyers are jumping in. Home sales jumped in January, increasing 2% from the previous month and 8% from last year’s figures, according to the National Association of Realtors. Demand is reaching a two-year high, almost as high as the boom spurred by the first-time homebuyer tax credit. This rise, however, is not artificially induced; it’s a true reflection of housing recovery.
Spring is traditionally a good time for home sales. As the weather becomes inviting, properties turn green, and the school calendar winds down, more people will become interested in selling, and buying. Sellers will be posting new listings and re-introducing properties taken off the market during the challenging winter months. The next round of foreclosures will be hitting the market as well, providing a boost in inventory for deal-seeking buyers. This should help keep prices low through the spring, but top properties are likely to see increased competition as more buyers enter the fray.
As economic factors continue to improve and more buyers enter the market, the best deals will begin to dry up in the face of increased competition. This is good for sellers, but buyers are far from hurting. Lending rates are projected to stay low, and large-scale price increases are still a few years away. So if you think you may be ready to buy, talk to your financial advisor, mortgage lender, and realtor to find out if the home of your dreams is ready for you.
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