If you’ve been thinking about buying a home of your own, this may be the ideal time to stop procrastinating. There are more than a few economical reasons to take the plunge this year, suggesting that buying real estate in the near future can help you save money and build wealth. Once you explore a few of the reasons listed below, you may feel motivated to finally act on your dreams.
Steady Stream of Homes Will Be Entering the Market
In the past few years, the number of homes on the market has been dwindling, leaving buyers few choices. This has meant home buyers either compromised and bought homes they didn’t really want or put off their homeownership dreams. Things have already started to turn around with an influx of new homes on the market, so finding your dream home may no longer be out of reach.
Home Prices Will Continue to Spike
Since there were so few homes on the market, sellers were able to ask higher prices. This resulted in an average 5.5% hike in sale prices. While the greater availability of homes will force that spike to level off, we’re still expecting home prices to rise, but at the lower 2% rate. Depending on how soon you’re ready to buy, you may be able to avoid additional rises in sale prices.
Mortgage Interest Rates Will Drop
While home prices rise, interest rates will drop and have already started to decline. This is exceptionally good news for buyers because it means homes are more affordable even with those rising asking prices. Rates peaked at 5% last year, but they have already dropped to 4.46% in the early months of 2019. This bit of good news comes with a warning, however. Financial analysts expect interest rates to rise in the future, so taking advantage of the current low rates is important.
Rental Rates Are Also on the Rise
If you think rental rates are already high enough, that’s another reason to consider buying this year. Rental rates are expected to start rising again and it seems the only way to avoid paying more is by buying a home of your own. Even if you end up paying more for your new home than you would pay in rent, remember that your mortgage payments are helping you build equity. Conversely, the money you pay in rent is just gone. Paying rent isn’t an investment that benefits you at all.
Buying a home is an investment that will pay off many times throughout your lifetime. Taking that into consideration, there’s never really a wrong time to buy. However, buying now, while the market is offering these financial incentives, can help you get even more out of your investment. You’ll start building equity sooner and you’ll get out of the rent trap that’s hurting your overall financial profile.