3 Reasons to Not Delay Your Home Buying Plan

Buying a home tops nearly everybody’s wish-list. Ironically, for most of us, it is a rather overwhelming decision, as we all have our share of doubts and questions. Questions like, “is it the right time to buy?,” “are there any chances of a drop in real estate prices?,” “can I get a lower interest rate than what’s on the table?,” “out of the countless available, which online loan calculator to trust?”. These, and several other similar smokescreens make us procrastinate our decision. Fact is, when it comes to buying a home, the time is almost always right. Period. Let’s take a look at three key reasons why should not delay your decision to buy a house.

1. Interest Rates are Historically Low

Your interest rate affects your buying power. The lower the rates are, the higher the home price you can afford; all things being equal. Let’s elaborate on this with an example. Suppose your monthly household income before tax is $6,000 and your monthly payments toward your car, credit card, etc. is $1,000. If the rate of interest is 4 percent (4.126% APR), the loan amount you can get is $242,975. If the rate goes up to 5 percent (5.134% APR), the maximum loan amount you may qualify for drops to $216,087. This means your buying power goes down by $26,888, which is a substantial drop and may force you to settle for a less than perfect option as your home. It is, therefore, advisable to buy a home before the interest rates go up. To find out the maximum loan amount you can obtain, use our online loan calculator.

2. Real Estate Prices Usually Go Up

A study conducted by the National Association of Realtors (NAR) suggests that during 2014, home prices went up by 6.6 percent. In addition to NAR’s report, another survey by ‘Pulsenomics’ shows that that the cumulative home appreciation is likely to hit 19.3 percent by the end of 2019. Even if we average the projection numbers of the housing experts, the estimated cumulative appreciation will be close to 11.7 percent. These studies indicate that you can expect the prices to go up in the near future, which will make home buying a more expensive proposition.

3. You Will Build Equity Faster

A study conducted by the National Association of Realtors (NAR) suggests that during 2014, home prices went up by 6.6 percent. In addition to NAR’s report, another survey by ‘Pulsenomics’ shows that that the cumulative home appreciation is likely to hit 19.3 percent by the end of 2019. Even if we average the projection numbers of the housing experts, the estimated cumulative appreciation will be close to 11.7 percent. In fact, history shows that home appreciation averages 3%-4% each year. These studies indicate that you can expect the prices to go up in the near future, which will make home buying a more expensive proposition.

Last Few Words

Real estate is one of the safest investment options with a fairly consistent track record of delivering a reasonably high rate of return, in terms of investment. In addition to being a safe option for long-term investment, real estate is a “forced savings” where your monthly payments are going to build equity and add value, not just disappear as soon as it leaves your bank account. Lastly, home ownership has several tax benefits. Therefore, whether you are planning to buy a home for your own use, or as an investment, there is no point in procrastinating the plan. You can check our online loan calculator section, to find out your eligibility. Or, to get detailed information on your home buying options, connect with us for a no-obligation consultation.


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