“Why not?” is my response to that! I’ve seen a lot in the two decades I have been in this industry. The market can change, which is out of our control. Due to this, there are certainly better times to buy than others, but making an investment in a home is a positive step for most.
As you have seen in the news, rates continue to be near all-time lows. This won’t last forever. At a Minnesota Mortgage Association conference I attended, a chief economist from Freddie Mac spoke on predictions. His prediction is that by this time next year, 30-year rates could be in the 5’s. Relatively speaking, rates in the 5’s are still good. Of course, for those of you who were able to take advantage of 30-year rates in the 3’s, this may seem “high.” It’s all relative. When I got in the business over 20 years ago, a 30-year was over 9.5% — sure makes the 4’s and 5’s look pretty good, right?
Appreciation is another great reason to buy. I understand that since the fall of the market in 2006, our housing appreciation has not been a factor, but overall in the picture of homeownership, you will likely have home appreciation. In the early 2000’s, home appreciation was obnoxiously high with double-digit value increases. This isn’t typical and helped play a part in the fall. That said, it’s quite normal to expect 2-3% increases each year and luckily for most homes in MN, that is currently the trend.
You can thank the federal government for another reason to buy – mortgage interest deductions. There are discussions in Congress to take this deduction away, which will be a shame if that’s the case. As of now, the interest you pay on your loan is tax deductible. Depending on your tax bracket and standard deduction, you may have excess deductions above the standard deduction to reduce your taxable income – meaning less in taxes for you!
There are many programs available for first time and subsequent buyers to help with down payment and closing costs. In years past, these assistance programs were limited to just MN first time homebuyers. That is not the case anymore with the popular MN Housing program. If homeownership is on hold so you can save money, you may want to talk to a lender versed in these programs to see if you are eligible.
Of course, the last reason I have (I am sure there are more) – is pride in homeownership. There is something to be said for owning your own home – having a place to call yours, a place you can improve or change at your discretion, a place of safety and a place you can be proud of. It’s an accomplishment to own and quite a wonderful benefit to be working toward YOUR goals of building equity, versus helping your landlord meet their goals of YOU paying for their property.
Why buy? Again, my response is, “why not?” If I can assist in helping you determine how homeownership can benefit you, please let me know. I am here to help!
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