Since I’ve entered real estate, I’ve heard a lot of people make comments like, “It’s a seller’s market, so I’m just gonna wait it out instead of overpaying.” Or, “None of the homes in town are worth what they are asking for.” Well friends, I’m sorry to tell you, but waiting is the worst financial decision you can make.
Let those who aren’t paying attention be the ones to pay extra, while you still get in while the getting in is hot. Yes, we do have a dramatic shortage of homes on the market right now. It’s exhausting, and that’s why many are giving up and stuck in the long-term trap of renting. Renting is a a necessary temporary solution, but there are so many reasons you need to own!
Here are a few reasons buying sooner than later is the right move:
1. According to CoreLogic, home prices have appreciated by 7.0% in the last 12 months. This trend isn’t going to change any in the next year or two!
**The $120,000 home you buy this year could be worth $137,388 in only 24 months. $17,388/24 = $724/month. How’s that sound for returns on your investment?
**Taxes on imported lumber and steel have unfortunately slowed the new housing market, meaning people aren’t building at a reasonable price like they’ve been able to. Less building = less homes coming for sale in our market = home prices up, rental prices up as demand stays high until people can find homes to buy 😦
2. Mortgage and interest rates are going to continue increasing, at a rate faster than the feds originally anticipated (as reported by FreddieMac’s Primary Mortgage Market Survey).
**Same $120,000 home @ 4.00% with a 30-year fixed rate. Say you take out a conventional loan with 5% down ($6,000). Loan of $114,000 over 30 years = $544.25/month w/ a total payoff of $195,930 (Principle and Interest). Bump that interest rate up 1/2 a percent and you’re looking at $577.62/month w/ a total payoff of $207,943.20. Half a percent just cost you over another $12,000…add that to the cost of your home going up?
3. Who’s mortgage do you want to pay, yours or your landlords? Building equity in your home is a forced savings plan; in a volatile market like ours, you can count on growing 6-8% for years to come!
4. It’s cheaper to own than rent!
**Check out the Trulia report showing that nationwide it’s 37.4% cheaper to own than rent! In MN it’s considered “a lot cheaper to own”, the biggest of all gap categories!
5. Being gone is great, but coming HOME to a place you take pride in is better!
Here’s the reality folks, waiting is going to cost you money. If you’re exhausted and frustrated, overwhelmed or just uncertain. Give me a call. Let’s set up an appointment and make it manageable, and together find that home for you. We have amazing lenders that will help you find a solution if you’re concerned over your down payment.
Don’t settle, but believe you deserve a home that can change how you live your life!
Read some more on your own in this article, Home Prices are on an Epic Run.
I know the next question is going to be, “Well, what incentive do I have to sell in this market?”
Stay tuned for some guidance on when and how to sell in a market like this!