This may be one of the most challenging home-buying markets in many decades. Low inventory, rising home prices, and volatile rates are the main contributors. But don’t give up the fight; buying a home still provides one of the best investment returns. According to a Federal Reserve Board Survey of Consumer Finances, homeownership is the largest source of wealth for families, with median values of primary homes worth about ten times the median value of financial assets. And a National Association of Realtors (NAR) study shows that single-family homeowners accumulated an average of $225,000 in home equity over ten years, and homeowners in 23 metro areas gained at least $500,000 over 30 years. So, when is the time to buy?
Housing experts will tell you that the sooner you can build up equity, the better. While it’s impossible to know the interest rates between now and the end of the year, waiting to buy until rates are lower may not be the right decision. According to real estate expert Barbara Corcoran, a guest on Good Morning America, everyone is waiting for rates to go down, so when they do, there will be a rush to enter the market. “Prices are going to explode, and you’re going to be paying more for the same house. And you can always refinance, remember, when and if rates come down,” says Corcoran.
Here are five reasons why you shouldn’t wait to buy a home:
- The sooner you buy, the quicker you can start building equity. Those payments you’re giving your landlord aren’t helping your net worth. Put that money to work for you.
- If rates do drop, you can always refinance. Rates fluctuate yearly, and if they ever fall to a point that allows you to save money, you can refinance at a lower rate.
- Save money on taxes. One of the main advantages of home ownership is deducting the interest you pay on your mortgage from taxable income.*
- Home values always go up. Except for the Great Recession, when they dipped slightly, home values in the U.S. have steadily climbed over time. In the first quarter of 2022, the median sales price of a single home increased 16% from the prior year to $368,200, according to the NAR.
- You always know what your payment will be. Unlike the unpredictability of a rent payment, a fixed-rate mortgage payment allows you to budget better.
Whether you are a veteran, a first-time home buyer, or self-employed and do not receive a W2, NASB has the loan solution to fit your needs. Contact the experts at NASB today at 855-465-0753 or click here for more home-buying resources.
*This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. North American Savings Bank does not make any guarantee or other promise as to the results obtained. You should consult your tax, legal, and accounting advisors before engaging in any transaction.