This year is as good a time as any to take that leap. Here are the main reasons:
- Rent is up
It may not feel like it, but buying your own home is cheaper than renting. Buying is nearly 38% less expensive, according to this report. As a monthly expense, rent looks like the more economical choice. But putting your money into something that you own places you in a better financial advantage for the long-term.Another important point to remember is that rent tends to increase with inflation, while mortgages, especially on fixed terms, are less likely to be affected.
- Mortgage rates are set to rise
In August last year, 30-year mortgage rates bottomed out at 3.55%. The latest rates are hovering at around 4%. Mortgage rates today are still historically low, but real estate experts predict that rates are set to keep rising.In addition, the Federal Reserve has started to gradually increase benchmark interest rates. Interest rate hikes do not directly cause mortgage rates to increase, but consumers will still feel the impact of these policies on your borrowing capacity in other forms, such as the interest on your credit card purchases.
Jump at the chance to secure a home now, before these rate increases begin to limit your purchasing power.
- The dwindling housing inventory
There are fewer homes sold today – and that won’t change anytime soon. If you keep waiting for a “better time” to buy a house, your options will continue to dwindle, just like current inventory.
- Home prices are rising
Because of the limited supply of homes amid consistent demand, prices have been shooting up over the last few months. Current prices are already higher than those before the 2007 economic crash. More than rising mortgage rates, however, buyers should be more concerned about rising home prices.
Recent reports on the slowdown in rising home prices mostly affects major cities like San Francisco and Manhattan, where median prices are already record-setting to begin with. In Cleveland, however, one of the more affordable markets today is still prone to this trend of increasing prices.
Aside from the above reasons, consider the “why” of your current interest in the housing market more than the “when.” If you’re moving up from rental living or taking a step toward a more family-oriented lifestyle, for example, and if you intend to stay put in your new home for at least five years, it’s easy to justify the purchase as a worthwhile investment, regardless of timing.
Read more about my homebuying tips here and feel free to give me a call at 440.823.2448. I’d be delighted to help you with your real estate needs in Greater Cleveland.