3 Reasons Why You Shouldn’t Wait to Buy a Home
Housing Prices are on the Rise
Do you wonder if your dream home will be more or less this fall? Well, there’s some pretty strong evidence that it won’t be less.
For instance, one of the most closely watched housing price indices is the S&P/Case-Shiller composite, and as of March, 2015, its 20-metropolitan area index was up 5 percent from the year before. In some places, like San Francisco and Denver, the rise over the past year reached double digits.
David Blitzer, chairman of the S&P Dow Jones Index Committee told Reuters, "I would describe this as a rebound in home prices, not bubble and not a reason to be fearful," he told Reuters.
Unless you’re worried about that dream home getting too pricey…
Owning is Cheaper Than Renting
It’s the perennial debate, right? When you rent, you’re building no equity and get no tax break, but you also dodge the bill for plumbing repairs. Owning gets you those bills, but also gives you a huge tax break and, with the right mortgage, you never get a “rent” increase. Plus, if all goes right, you’ll own your home during retirement.
But which is cheaper? According to a report by Forbes in October, 2014, buying a home is a whopping 38 percent cheaper than renting. “Homeownership remains cheaper than renting nationally and in all of the 100 largest metro areas,” the report said.
And that was when rates were about half a point higher than today. Which brings us to the last point…
Mortgage Rates Are Expected to Rise Soon
It’s been a long time coming – specifically nine years. That’s the last time the Federal Reserve raised short-term interest rates, and thereby triggered a rise in mortgage interest rates. But by all indications, they’re set to raise rates this September.
“It will take a significant deterioration in the economic picture for me to be disinclined to move ahead [with raising interest rates],” Federal Reserve Bank of Atlanta President Dennis Lockhart told the Wall Street Journal on August 4, 2015.
The move is because of the fear of inflation and strengthening of the economy.
Rates as low
as 2.97% APR. See now!
That’s right, though rates will likely rise, they are still very low now: as low as 2.97% APR on a 5/1 ARM mortgage.