Why Buy a Home Now?
There are more reasons to buy right now than we are likely to see in a generation or more. And while most analysts believe the housing market will continue to be buyer-friendly for awhile, this moment – when so many factors are in alignment –will not last. Anyone planning to buy a home in Colorado over the next 2 to 5 years who could buy a home now rather than wait would be well advised to act. Here are the factors in play:
Interest Rates are Low
Interest rates are at an historic low. They in fact cannot go down any further and are under systemic pressure to begin rising again. Since interest payments are such a large percentage of a monthly mortgage payment — especially in the first years of a loan — the amount of interest charged to that loan makes a tremendous difference in the size of your monthly payments. People who could barely afford a two bedroom home when interest rates were high might find even a 4 bedroom home affordable when rates get as low as they are today.
It's a Buyer's Market
A lot of people are selling right now because they simply have to. They can’t afford to wait, and they’re willing to do almost anything to convince buyers to choose their homes. This has a ripple-effect through the entire market that works to the buyers’ advantage. As a result, sellers, new home builders and financial institutions across the board are offering a wide range of value-added incentives and financing. Free goodies — what’s not to like!
Home Ownership Builds Equity and Wealth
Thinking ahead and saving for the future is the only smart game plan in today’s economy. And home ownership is the only investment that works double-duty for you, supplying your family’s immediate need for shelter as well as its long term need for investment. You can’t snuggle up in a stock derivative, entertain in a mutual fund or redecorate your bond portfolio. A home is the only investment you can actually see, use and enjoy every day while it’s growing in value for you.
Real estate is also the one investment you can take delivery of without paying for it in full. So when you think about how much a home is increasing in value, you want to compare it, not to the sale price you bought at, but to the down payment you actually made. Let’s say in the recent up and down real estate market a house Colorado increased in value by only $10,000 over the past 5 years. That may be far short of what the owner expected. But if he only paid $1,000 down when he bought the home, his investment increased by a thousand percent! The Dow Jones Industrial Average has never performed anywhere near this range.
That’s why home ownership is a practical and effortless way to build long term wealth for many families – and right now more so than ever, when other investment instruments are looking so uncertain. As a Colorado home owner, you build equity in your property with every monthly payment, and you get “free equity” on top of that as property values rise.
Remember: Colorado property values only go down in the short term. Over the long term, they rise very, very well. They always have.
Choice
Todays Homes has more floor plans, more price points, and more Colorado Front Range communities to choose from than ever before. The selection has simply never been better.
Rent Versus Buy
Buy. Definitely. Unlike stock, you can’t “opt out” of housing. You have to live somewhere, so you’re spending that money anyway. Why pay someone else’s mortgage when you can be paying your own?
Studies show that owning a home is the hands-down best way to build long-term household wealth. They further show that the sooner you own a home, regardless of size, the faster you are able to build equity and accumulate real wealth.
Why Wait?
The real estate market is always fluctuating. Trying to predict its short-term moves is a full-time job that no one can do with any accuracy. That doesn’t stop lots of people from trying, though, and it’s a game of fools. Someone saving a few dollars by waiting a couple of years to buy a home has spent two years paying rent instead of building equity. Rarely are the savings so great that they were worth the trade-off. And a majority of waiters never find the savings they were waiting for. It’s a real estate truism that time is only a friend to the person who has already made a purchase.