Need to Buy a House? Here are 5 Reasons Why NOW is the Time
It can be difficult to know when the housing market hits bottom. It’s even hard for experts to agree when one’s occurred and sometimes we don’t know it’s over until prices and sales volume start to rise again. That’s why the best time to buy is when market conditions and indicators suggest a bottom.
Since it can be difficult for anyone to know when the market has hit bottom that means there’s still some risk for home buyers. You may have to take a risk to take advantage of low mortgage rates and home prices that are still well below previous records. You may even need to risk riding out another short-term dip in property values but the rewards may be well worth it.
Here are five reasons to buy a home right now.
1. More jobs are available. The unemployment rate has been slowly dropping in the U.S. and that is a good indicator a boost in the economy isn’t far behind. Employment increased in professional and business services, health care and social assistance, food services, and transportation and warehousing over the last quarter. With more jobs typically come more home buyers.
2. Houses are a great hedge against inflation. The actual inflation rate can be difficult or impossible to pin down but one thing we do know is that it exists. Having money sitting in the bank isn’t a bad thing but unless you have an outstanding interest rate on your saving account chances are your money isn’t keeping up with inflation and it’s actually loosing purchasing power over the years. That’s why a million dollars today doesn’t buy as much as a million dollars did 20 years ago. Buying a house or property that naturally appreciates over time instead of depreciating is a great way to invest your money and hedge rising inflation rates.
3. Housing price increases are slowing. After the recession homes were for sale at a discount. In the past few years we have seen prices rise very quickly. The overcorrection in home prices from the recession is slowing and home prices are stabilizing making now a great time to buy a house.
4. Mortgage rates are still low. During the recession, mortgage rates for a benchmark 30-year, fixed-rate loan averaged 4.32 %. Now they’re close to that and there’s no recession. That means mortgage rates have nowhere to go but up. Take advantage of them while you can.
5. Pent-up demand. Since the recession in 2008, household formation fell dramatically to one percent of the national population. It’s logical to think that the once more of the population feels comfortable and confident with economic conditions the number of home buyers will only go up. Taking advantage of fewer buyers in the market is a great way to find great deals on homes in areas that could soon have more demand than supply.
A housing recovery doesn’t occur predictably. There are surges and dips. Buyers could wait for better conditions, but the present conditions of falling mortgage rates, slower home prices, and larger supply doesn’t happen very often and you may have to wait a while before you see it again.