If purchasing a new home is something that you are planning to do in the next year, making that purchase during the last quarter of 2013 might just be an excellent idea. Financial experts are saying that it’s cheaper to buy then rent right now because rates on fixed rate loans are excellent. Also, as compared to last year, some financial institutions are a bit more easy with their loan qualifications this year. The following reasons to buy a home before 2013 ends make a darn good argument for buying now. Enjoy.
- Mortgage rates are still going lower. Although the average rate for a 30 year fixed-rate loan is 1.15% higher than its historic low of 3.35% at the end of 2012, the 4.50% rate we’re seeing right now is still very attractive. Additionally, inflation rates are low and the housing sector continues to get stronger, both of which promote low mortgage rates.
- Buying is cheaper than renting in many areas of the country. Buying a home rather than renting one (or renting a condominium or apartment) may make financial sense if you live in a large metropolitan area. Indeed, in the 100 largest metro areas in the US, buying a home is almost 45% cheaper than renting.
- Home prices still remain relatively low. While price trends for housing can vary significantly based on the location that you are searching in or, in some cases, even by neighborhood, on average they look promising throughout the entire country. With only a 1% increase in the S&P/Case-Shiller composite index of 20 metropolitan areas, 2013 is still an excellent time to buy a new house.
- Getting a mortgage should be easier. 2013 has seen requirements and qualifying criteria for mortgages become quite a bit more relaxed, especially if the person applying has an excellent credit score and 20% available for a down payment. With credit unions and banks making it easier to qualify, getting a loan on your dream home may very well be possible until the end of the year.
- Home “flippers” are posing less competition this year. In 2013 people who purchase and then “flip” houses haven’t been able to move them as quickly as they have been in recent years. This has had the effect of giving prospective homebuyers quite a bit more inventory from which to choose and, with this choice, less pressure to close a deal on one home because of a pending offer on another. Until at least the end of 2013 you should still be able to enjoy a bit more freedom to shop around and find the house that suits you best.
- Avoid the rent increase that 2014 will bring. The price to rent an apartment, condo or private home has been increasing much faster than inflation and, with 2013 near its end, the price increase that 2014 brings is just on the horizon. If you’re keen on buying your own home and want to avoid this increase, now may be the best time to do it. If you have an excellent credit history you may well end up paying less in mortgage payments than you do in rental payments. Plus you won’t have to deal with nosy, noisy and bothersome neighbors.
Frankly, buying a home isn’t the excellent investment that it used to be 30 or 40 years ago. That being said, a home can still be a decent investment if you are able to purchase it at a great price and hold onto it for at least 10 years. With interest rates on the rise purchasing a new home now, if you are going to do it anyway, might save you quite a bit of money in the long run. Best of luck with your home search.