The answer could be...yes
From: Somerset 08873
Well, the super rich certainly think it's the time to buy real estate! The Wall Street Journal and Business Week magazine both published articles about business titans, foreigners and celebrities who are buying up luxury properties. Granted, financing might not be as crucial for them as it is for others.
So, what does this trend mean for mere mortal buyers cautious about making an offer on a home they really like today? The reality is that serious buyers might not want to wait. Inventories are high, giving a tremendous choice of homes. Local home prices have come down and mortgage rates are historically low.
What are the benefits of not delaying a planned home purchase?
- The tax deductions you're eligible to take for mortgage interest, property taxes and Private Mortgage Insurance (PMI), for those who qualify, greatly increase the financial benefits of homeownership. You will reap these benefits sooner.
- Buying sooner gets you away from paying rent and starting to build equity in your home over the long term. Although real estate moves in cycles, sometimes up, sometimes down, over the years, real estate has consistently appreciated.
- Waiting could mean the home that you really want went to another buyer.
- Waiting for lower home prices might not equate into the overall savings buyers might expect. Recently, Time magazine made the argument that home prices and mortgage rates do not necessarily sync.
The article explains the purchase of a $218,900 home today with an interest rate of 5.5% ends up with monthly payments less than a dollar apart when compared to purchasing the same home a year from now at $197,010, a decrease of 10% in price, but with an interest rate of 6.0%. The selling price savings evaporates with the increase in interest rates.
