Why Buy a Home Now?
You’ve heard news reports saying that the housing market is in turmoil, and that home prices are stalling, if not falling, in many areas. And it is tougher to get home financing. So does this mean it’s game over – is it just too late to buy a house?
Well, before you write another rent check, or write off the opportunity to buy another property, consider the following reasons now may be a great time to consider buying a home…
Four Reasons Now May Be A Great Time To Consider Buying A Home
- Reason #1: Mortgage interest rates remain at historic lows.
The average interest rate on 30-year fixed-rate mortgages remains close to historic lows and well below the 9.2% average of the past 35 years. Subscribe now to receive the latest mortgage rate information. - Reason #2: An increase in mortgage interest rates can dramatically affect the amount of home you can buy.
As an example, let’s assume you want a monthly mortgage payment of approximately $2,000. At a 6% mortgage rate, this would translate to a $347,000 home. If the rate rises to 8%, your purchasing power would drop to $284,000. - Reason #3: Homeownership is a solid long-term investment.
Over the past 30 years, national home prices have appreciated at a 6% average annual rate. Although there have been sharp variations in local markets for each of the past 31 years, the typical U.S. home has increased in value. It’s simple: Owning a home can help you reach your financial goals. The money that you pay to rent your home does not. - Reason #4: There is no better time.
Timing when to enter the housing market is difficult. In terms of building financial security, what counts is time in the housing market. Housing values are affected by local economic conditions. On the local level, you may see dips in home values, but history shows that even with those dips, markets can and have recovered. Let’s look at the recovery in two housing markets.
Houston suffered during the 1980s when oil prices collapsed and the local economy sputtered. Over a four-year period, housing prices fell about 25%. Home prices recovered, and by late 2007, the typical Houston home bought just before the oil-price downturn was worth 67% more than it was at its 1983 peak. All told, over the past three decades, the typical Houston home has appreciated 3.7% per year. In the early 1990s Los Angeles suffered six consecutive years of depreciation, with the typical home bought at the peak (mid- 1990) falling almost 22% in value. Yet, by 2007, this home was worth 268% of its 1990 value. (1)
Next Steps
Wells Fargo Home Mortgage can help you achieve your personal and financial goals through homeownership. Plus, when you close a new mortgage or refinance your loan through The NAWBO Home Financing Program you can receive a $200 Closing Cost rebate. (2)
To learn more about your benefits through The NAWBO Home Financing Program and find out how we can help, call 1-888-568-1906 or visit us online.