When the Time To Buy is Right
Making the decision to purchase a home is one of the biggest decisions you will make in your lifetime . Even before you begin looking into homes on the market in your community , it ’ s important to consider whether now is the right time for you to buy .
So is now a good time to buy a home ? Professor Robert Shiller , one of the winners of this year ’ s Nobel Prize in Economics , certainly thinks so . Recently , he told reporters : “ Affordability is still good compared to any time over the last 50 years . Mortgage rates are still around 4½ percent ; that ’ s not high .”
Although both home prices and mortgage interest rates have gone up over the past year , they are still low from an historical perspective . That ’ s because over the past five years , housing prices in many markets declined sharply . So recent home price increases are coming off a lower base and really just bringing prices back to where they were in the mid-2000s .
Likewise , as interest rates moved up since last summer , their starting point was at a level that hadn ’ t been seen since FDR was president .
However , these trends only tell part of the picture . There are many documented financial and social benefits to homeownership , including :
Tax Deductions
Mortgage interest , local real estate tax and even mortgage insurance premiums are usually taxdeductible .
Building Equity In A Home
With each mortgage payment and appreciation over time , homeowners increase the equity in their homes , making it their largest single asset .
Borrowing Power
Equity can be used in the form of a loan , for emergencies , investment properties , big ticket items , etc .
Stability
Property taxes may go up every year , but with the most popular fixed-rate mortgages , your cost each month is fixed . Also , remember that the alternative is to rent . And what does that get you ?
Buying A Home Is Good , But Why Now ?
Looking at recent numbers , most experts agree that now is a good time to be in the market for a new home . Home prices as of the end of 2013 were up more than 11 % from 2012 , according to CoreLogic . And in Denver Metro , home prices rose nearly 9.5 percent .
Interest rates are also comparatively low — a 30-year fixed rate mortgage is about 4.3 percent — significantly less than it was five years ago . And remember when your parents were buying homes in the early 1980s ? Rates then were nearly 20 percent .
So between rates , prices , historical norms and all the ancillary financial benefits of homeownership , the timing for buying a home couldn ’ t be better .
Luckily , you don ’ t need an award-winning economist to help you through the process . A mortgage lending professional can walk you through all the options in rates , length of mortgage and different products .
© 2013 W . J . Bradley Mortgage Capital , LLC . 6465 Greenwood Plaza Blvd , Suite 500 , Centennial , CO 80111 Phone # 303-825-5670 . NMLS ID 3233 . Trade / service marks are the property of W . J . Bradley Mortgage Capital , LLC . This is not a commitment to lend . Restrictions apply . All rights reserved . Some products may not be available in all states . WJB is not acting on behalf of or at the direction of HUD / FHA or the federal government . All Borrowers and properties securing Mortgage Loans must be approved by WJB . Loan terms subject to change without notice . “ Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act RML No . 4131002 ”).
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