You might have heard that this year the real estate market belongs to the sellers and buyers do not have much edge this time around. We talked to an industry expert and he had something totally opposite to suggest. If you are a first-time home buyer, you should buy a house in the next five months. Indeed, both the rates and home prices are on the rise, but despite this, the situation can still be advantageous for you. Here are the main reasons which the expert shared with us.
Home prices have still not become that high
Yes, home prices are on the rise, but they are still not as high as they used to be in the past. Compared to the prices in the year 2006, the values are still less than 20%. According to some reports, the price levels are close to those that were observed in the summer of 2004. If your local real estate market is still recovering, you can expect the levels to rise higher in the next few years, which is exactly why you should buy now and not later.
Interest rates will also keep on rising
The interest rates are already on a slow rise, and in the future, they will increase at an even faster pace. Let this year end and the rates will probably reach 5%. Not much of a hike you say? Considering your monthly payments, even a point increase can cause your payments to rise excessively.
Rents are increasing
The argument between renting and buying a home is a discussion that will always go on for years to come. In all actuality, it is just a matter of your affordability and personal preferences. Still what you cannot ignore is the fact that rents are rising, and if you are looking to cut down some of these monthly expenditures, homeownership might be a good idea. Of course you will have to deal with mortgage payments for several years, but in the long run, buying is cheaper in a lot of areas.
Your debt is decreasing
In recent times, Americans have significantly reduced their debts and you may be on this list as well. A reduced debt means a higher credit score and more buying power, which can pave way for a better deal.