Eight, ocho, huit, acht, however you say it, is a good number. A solid number. Not too many, not too few.
While I do not necessarily recommend home ownership to everyone and will be honest with folks that I don't think are either ready or in a good position to purchase, I do support and encourage home ownership. To achieve maximum benefit one must be in a situation that will be stable for the next five to seven years. If you might relocate in the next twelve to twenty four months I would probably not advise you to purchase a home. It takes about three years to break even, so I would suggest that if you are not planning on relocating three years or more, buying a home vs renting should be a part of your calculation.
Having stable income is also a must and it while you can purchase a home with little or no savings using gift money or one of the 100% financing options, those loans without any savings to back them up make me nervous. Just because I can get the approval doesn't necessarily make it the right thing to do. Furnaces need to be replaced, roofs repaired, etc. So it is important to have some back up funds and a reliable job in case of emergency.
1)
The first and most compelling reason to purchase a home now and not put it off is the low mortgage rates. I know, I know, they have been low for quite some time. Long enough that an entire generation has come of age knowing nothing else. It is hard to convince younger buyers that have seen anything but rates in the high 3's and low 4's that it will ever change. To be honest, they have hung around a lot longer than I would have predicted. But they will go up. The moment it looks as if the housing market is stable and the economy is growing at a steady clip, look out.
2) More inventory, more choice.
myscottsvalley.com
Housing inventory has increased steadily over the most recent years. Value is up and sellers are now more confident that they have equity and may be able to walk away from a sale with a little money in their pocket. With values increasing and rates remaining low, a seller has an excellent chance of being able to sell and buy their new home at a good price. Waiting to sell only increases the chance that the seller will have to pay more. Add to the fact that new phases of subdivisions are now being developed as the new home market has come roaring back-now may be an excellent chance to investigate new home construction if you can't find an existing home that meets your needs.
3) Beat the price increase.
economist.com
As I mentioned earlier-prices on homes will be increasing. As the market comes back, more buyers will be entering and sellers will be able to sell their homes at a higher price. Currently HUD is looking at easing some of the constraints that have kept qualified buyers from mortgage eligibility, and Fannie Mae and Freddie Mac are reviewing their fee structure with the idea in mind of reducing stipulations on consumer lending. All of this should mean a more robust market next spring. Builders too will have to pay more for materials. Those price increases generally happen in January so a word to the wise if you think new construction is in your future-get that contract locked in prior to January.
4) Has anyone mentioned that rents keep going up?
ocrealestateconsultant.com
It is all about supply and demand folks. When people are unable to purchase a home due to credit issues from the recession, not being able to find a stable job, or not being able to save a down payment, they rent. The more renters there are, the more the prices go up. From what I have been told, in our area at least, finding a decent rental is going to cost as much or more than buying. The farther away we get from the Great Recession, it is increasingly likely that people will start thinking about buying instead of renting, if for no other reason that the cost.
5) Employment stability is increasing.
Tippecanoe County is moving forward with increased employment opportunities. A new assembly line at Subaru and a new General Electric plant are compliments to the old standbys of Caterpillar, Alcoa, Purdue and Wabash National. Employment is on the uptick. It is a fact that employees that own their homes become more rooted in the community and decreased turnover is the result. If more people are moving to the area, the demand for housing increases.
6) You have to pay to live somewhere.
That's a fact, unless you are residing in your parent's basement. Sooner or later adulthood demands that you have to pay to live somewhere so you owe it to yourself to consider buying a home.
7) If you buy right, owning is forced savings.
24/7.net
As we move into a more normal economic period, homes will once again accrue value. While buying a home is not a short term investment, over time a home in a desirable location should appreciate in value. And keep in mind it is all about the location, and how you buy.
8)
mediamanage.com
For most people the mortgage interest deduction is the single largest deduction on the income tax. The home mortgage deduction can be the difference between paying taxes and receiving a refund. And with home ownership come property taxes. Property taxes are also deductible. So if you receive $1200 back in tax benefits, that nets out to a $100 a month reduction in your mortgage payment. It is important to keep this fact in mind. Rent is not deductible from the federal taxes.
There you have it. Eight good reasons not to put off home ownership until next month, next year, or the year after that. You could be saving money, building equity, and lowering your tax liability. If not now, when?
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