October 15th, 2014 8:35 AM by Jackie A. Graves, President
To take advantage
of near-record low mortgage interest rates and home prices undervalued by as
much as three percent nationwide, now is a great time to buy a home.
missed the bottom of the market, but that doesn't mean there aren't great buys
to be had out there. Your community may not have appreciated as quickly as some
of the big metro areas have recently. Your boom may yet come.
To begin with, the
economy is growing. From information gathered on or before August 22, 2014, the
Federal Reserve's "Beige Book" report found economic activity is up
in all eight national districts, including consumer spending, freight loads for
deliveries of goods, and more.
But there are even
better reasons to buy a home right now. Here are just a few:
More jobs are
Department announced that the jobless rate is now below six percent. Consider
how far the job market has come since January 2010 when unemployment was 9.7
The Consumer Price
for All Urban Consumers is up 1.7% from August 2013 to August 2014, excluding
volatile food and gas prices. The food index has risen 2.7 percent over the
span, while the energy index has increased 0.4 percent. This is the first month
that the index hasn't risen since 2010.
Why is that good
for homeowners? Even in a tepid inflationary environment, when prices rise, a
major asset such as a home, purchased at a fixed cost, becomes more valuable.
Typically, in an inflationary environment, housing prices rise.
gains are slowing
existing-home price in August was $219,800, which is 4.8 percent higher than
home prices in August 2013. This marks the 30th consecutive month of
year-over-year price gains. In 2013, home prices rose in the double digits.
rates are still low
According to Freddie Mac's archives,
the lowest that mortgage interest rates have been in modern history (since
1971) was in November and December 2012 at 3.35 percent with 0.7 points for a
benchmark 30-year, fixed-rate loan, and that was back in 2012 before the
housing recovery began in earnest. The most recent Freddie Mac survey found
national averages at 4.16 percent with .05 percent points in September 2014.
ready to release
Household formation has been muted since the Great
Recession, preventing as many as 2.5 million people from forming households who
otherwise would have. Economists with Harvard's Center for Joint Housing
Studies predict that annual U.S. housing starts should average 1.4 to 1.5
million over the coming decade. Considering that the largest generation ever
–81 million Echo Boomers -- are well into renting and homebuying age, the
numbers should be closer to the 2.3% annual growth of the 1970's, when 78
million Baby Boomers reached adulthood.
Buy VS rent ratios
Trulia, a real estate
marketplace and research group announced that nationally, rents rose 6.5%
year-over-year in September 2014. Apartment rents were up 6.9%, while
single-family home rents gained 5.2%. At the same time, housing prices have
A housing market
never remains even. There are always surges and dips. Buyers could wait for
better market conditions, but the present alignment of low mortgage interest
rates, slowing home prices, rising rents and pent-up demand add up to great
reasons to buy a home right now.
Written by Blanche
Evans | To view the original article click here