Is This a Good Time to Buy a Home?
There’s never been a better time to buy a home. A multitude of reasons have made it popular and profitable to buy a home. The benefits of buying a home now could disappear as early as October, so it's important to be in the market now if you're interested. Here’s what you need to know.
Tax credits
The first time homebuyer tax credit provides up to $8,000 for homeowners to purchase a home. With lenders seeking down payments as high as 10 or 20 percent, an $8,000 tax credit adds up to get part of the down payment back around tax time.
The tax credit expires Dec. 1. Due to closing delays, homeowners should close on their home at least 45 days before Dec. 1 to ensure they qualify for the tax credit. Many brokers insist a late year rush could delay home closings and people counting on the $8,000 tax credit may be left wondering what happened.
Interest Rates
Interest rates are near record lows. The Federal Reserve lowered interest rates to stimulate the economy. Further decreases are not likely because that could trigger inflation. What this means is now is the best time to buy a home and save $1,000s over the course of the loan on interest.
A Buyer's market
Open the newspaper. Look at the listings for foreclosed homes. Check a bank auction notice and see the listings for foreclosed homes. Foreclosed homes are everywhere. What this means is the market's been flooded with foreclosed homes and unsold properties. Home values have dropped and so has the cost to buy a home. Owners and lenders are more willing to negotiate with buyers than ever. People in foreclosed homes may find themselves desperate to move but don't have an option. A desperate homeowner equals abundant haggling room and opportunity for tremendous savings.
Yet more reasons
Still undecided on buying a home? Anyone wanting to live in the same home for several years should expect to save money on a home over an apartment. Homes, up until the last few years, rose in value. Paying for an apartment is paying month to month with no forethought for your economic future. Over the long term, the clear winner is a homebuyer over a renter and it's by as little as a few thousand dollars and as much as tens of thousands of dollars. Equity is real and when the market rebounds it will be the name of the game in real estate once again.
Buying a home creates a sense of pride and improves quality of life. A person has the freedom to make changes as needed instead of worrying about apartment restrictions.
Not yet ready?
If your financial situation prevents you from purchasing a home right now, start preparing. The market will be good for some time, just not as great as it now. Still there are steps you can take to prepare to take advantage of the market as soon as possible.
Save $100, $200 or $500 per month for a down payment. This savings prepares you for the upfront down payment. You'll also get an understanding of the kind of home you can expect to afford.
