Spring is a popular time to begin shopping for your first, or next, home. The weather is getting warmer, more houses begin popping up on the market, and possibility is in the air. Should you buy a home in the spring, or should you wait? Here are four good reasons to buy now.
1. More Home Choices
Sellers are incentivized to sell in the Spring, as they stand to make more on their sale with more buyers in the market. This means more inventory for you to choose from, if you are in the market to buy. Being able to bid on multiple houses may give you the edge as a buyer, and doing so in the Spring means there will probably be fewer offers than in the summer.
2. Prices Will Probably Rise
Generally, home prices tend to be higher in the early summer when school is out, and moving is easier. You may stand to get a better price by making your offer now than waiting for your chosen market to heat up (no pun intended). A lower price means that your purchasing dollar can go further towards making your new home the best that it can be. Not to mention, it could give you the edge in an offer if the home your eye is on is below your budget!
CoreLogic’s latest U.S. Home Price Insights states that home prices have risen 4.4% over the last year, and are projected to rise 4.6% over the next 12 months.
3. Interest Rates Could Rise
Freddie Mac’s Primary Mortgage Market Survey shows that interest rates are currently at a low. Industry experts expect rates to be higher by this time next year. No one knows how long interest rates will stay at current levels, or if/when they will rise. The interest rate, combined with the price of the home, is a critical factor in the affordability of a mortgage, so it is worth considering.
4. Forced Savings And Family Wealth
As we have mentioned in the blog before (most recently in Rent or Buy? A Fool, Do Not Be), homeowners average net worth was over 3,000% higher than that of renters in 2015. (see Homeowner Average Net Worth 3,600% Higher Than Renter)
How can this single variable make such a difference? Forced savings. When you pay rent, you are paying for the privilege to live on someone else’s property for an agreed upon period of time. The income from your rent goes toward property maintenance, property tax, and the debt owed on the property, if any at all. In short, you are paying your landlord’s mortgage, which increases his own net worth.
When you make a mortgage payment, part of it goes towards the interest on your loan, and part of it goes towards the principle amount borrowed. As the principle on your mortgage is paid down, you are essentially buying equity in your own home. This equity has value, and factors into your net worth. In time, if you choose to sell your home, the equity you have accumulated will be yours to keep!
As millionaire finance author David Bach has said (see Millionaire Tells Millennials To Buy A Home),
“The fact is, you aren’t really in the game of building wealth until you own some real estate.”
As home prices continue to rise over time, the opportunity cost of waiting to buy is something that should be carefully considered.
Who Is On Your Team?
We specialize in helping home buyers fulfill their dreams of homeownership. Whether you are looking for your first home, your next home, or to refinance the home you’re in, Benchmark has your back. We work hard to get the perfect loan for your unique situation, and hold your hand from beginning to end.
Find your Benchmark branch and contact them today to get started.Give us a call or contact us today. At Benchmark, we’ve got your back.Give me a call, send me an email, or request a call today. My team and I will take good care of you.
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