To Buy or Not to Buy?
The question that has been on our minds; at least lately, hasn't it?
Well, at the very least it's been the question on all potential homebuyers’ minds this fall. Over the past few weeks, the mortgage interest rates have soared to a 14-year high. Excessive government spending combined with surging energy costs and rising inflation has caused many would-be homebuyers to lean toward the wait side of that argument. But is this really a bad time to purchase a new home? Maybe not.
First, there is no way to predict the bottom of home prices for any recession. If the economy continues to struggle, it’s likely that home prices will continue to drop, offering better sales prices. But at the same time, inflation is still rising, and the Federal Reserve has clearly indicated they will raise interest rates as needed to cool this trend. This means that while home prices may come down some, the cost to borrow money will also rise; for homebuyers on the fence, they are hoping that the lower sales price will outpace the rising interest rates
The truth is there is no way to know this. Therefore, is this a good time to buy a home?
Well, Yes, if the home buyer finds the right home,
However, there are three important things to consider:
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Consider the Alternative: RENTINGList Item 1
Though renting is a great alternative for many needs remember just because you rent doesn't mean you're not affected by the rates.
The rising inflation WILL affect rent prices too. On the flip side, a stable mortgage payment is a great hedge against increased housing costs.
When you think about it in a different way; wheather the rates are at 2% or at 8% as a renter, you're paying 100% and getting 0% equity in return!
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Let's Build Equity While We Wait!List Item 2
Now on the subject of equity...
Buying a home allows the new homeowner to start building equity immediately.
Okay, so perhaps this isn't your dream home. Maybe you are still romanticizing about a couple years ago when you could have, would have, should have purchased your dream home for less money.
Here's the thing we can't ever change the past but we can absolutly take advantage of the present. Sit down and consider: is it more important to you to wait and maybe, just maybe, the prices will come down or take control today of your future and add equity while building credit for when you see the house of your dreams. Now at that point, regardless of wheather the rates and prices are ideal, you would have everything you need to purchase the house your heart truly desires.
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Remember, Refinancing is a Thing.List Item 3
Finally, a mortgage can be refinanced when the economy recovers, home values recover, and interest rates come down. So, potential homebuyers should not shy away from buying a home, if they find the right fit for their needs
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