If you’ve turned on the news lately, you know interest rates have gone up quite a bit since this time last year. Add in the big increases in home prices seen through the pandemic, and you may be wondering if now is a good time to buy a home. While interest rates and prices may make it seem like it might not be a good time to buy, the opposite is true. There are many good reasons to buy a home now, including the fact that interest rates are starting to level out and decrease. In fact, according to Freddie Mac, rates dropped 0.59 percentage points in December after peaking in November, the biggest three-week decline in 14 years. Here are four more reasons why buying a house now is a good idea.
More Options to Choose From
Bidding wars. Offers well above asking price. Waiting lists. Having to make an offer fast. Over the last few years, there were many roadblocks to buying a home thanks to low inventory and more buyers than sellers in the market. Inventory has started to stabilize, and the frenzy of the last few years has died down. That means you as a buyer are in a great position to find the home of your dreams. You don’t have to rush through the process, worry about being outbid by others, or agree to contingencies that are less-than-advisable (not doing inspections on existing homes, for example). Liberty Homes currently has several options for new townhomes or new single-family homes that are loaded with upgrades and come with a one-year home warranty.
Prices are Steadying or Falling
The skyrocketing prices of the pandemic years have gone away, and now prices are much steadier, and in some cases, going down. Steadying and decreasing prices are a good offset to increases in interest rates and can save you in other areas, such as property taxes. Not to mention once interest rates come down, you will be able to refinance a lower amount at that lower rate vs. the higher amount of a new purchase at the lower rate. Liberty Homes has many move-in ready homes that have seen HUGE price reductions recently. In fact, our townhomes in Montebello @ Liberty Village have been reduced by as much as $69,000 (as of January 2021).
Home Ownership Comes with Built-In Financial Benefits
From tax credits to building up equity/net worth, owning a home has many benefits beyond just having a place to call your own. Reduce your taxable income by claiming the interest paid on your mortgage, property taxes paid, and, if you purchased the home during the tax year, some closing costs, such as prepaid interest, prepaid property taxes, and points. Plus, build your net worth through equity. Though home values may be cooling off and in some cases starting to lower a little, historically home values make steady increases over time. According to historical median home value indexes, the median home price in the United States in October 1992 was $100,639.66. Ten years later, that number was up to $159,412.61. Another 10 years later in 2012 (after the housing crash of 2008-09 and when prices were just starting to go back up), the median home price had increased to 180,461.30. That means if you buy your dream home now and don’t sell right away, you can expect to gain equity/net worth. It also means if you wait, you likely will pay more for a home than if you buy now.
Rent Prices Have Been Increasing Steadily
Another financial benefit to homeownership is predictability for housing expenses. Over the past couple of years, rent rates increases averaged anywhere from 9 to 25 percent in various Utah cities. There is still a housing shortage in the state, meaning these increases aren’t likely to lessen any time soon. With a mortgage, you are guaranteed pretty much the same housing costs year after year (escrow may change slightly each year based on property taxes). There will be no big increases or unhappy surprises year after year.
Looking for your dream home? Liberty Homes has been building new homes in Utah for nearly 30 years. We take pride in our trade, crafting each home as if it were our own. Our quality, affordable homes are energy smart and thoughtfully personalized for your active Utah lifestyle. We currently have townhomes available in Salt Lake County, single-family homes in Heber City, and 55-plus single-family homes in West Jordan. Contact us today to find your dream home.
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