This is due to many veterans not being able to purchase a home that suits their needs due to high home prices
Many homebuyers are leaving states with higher home prices and relocating to states with affordable housing
Record low mortgage rates are fueling more homebuyers in an already low inventory housing market
In this article, we will cover and discuss The Right Time To Buy A Home With Low Mortgage Rates.
Is 2019 The Right Time To Buy A Home With Record Low Mortgage Rates
When is the Right Time To Buy A Home?
Many would-be homebuyers have waited for a real estate market correction
However, home prices have been increasing in the past three years with no sign of a correction
To confuse homebuyers, mortgage rates have dropped significantly since the start of 2019
There are so many conflicting reports in the news with a potential pending recession
The economy has been great for quite some time
Fears of inflation concern many taxpayers
Talks of Trump’s trade war with China and other nations are often causing alarms on whether it will affect jobs
The pending 2020 election is causing uncertainty if President Trump does not get elected
Recent talks of the impeachment of President Trump is also another concern
Why all these concerns affect homebuyers?
This is because a home is one’s biggest and most important investment. Average home prices are $297,900. Many folks who went through the 2008 Great Recession do not want a repeat of another financial disaster.
Where Are Mortgage Rates Headed?
The Federal Reserve Board has been decreasing interest rates.
This year, the Feds lowered rates for the first time since the 2007 Great Recession
Lower interest rates by the Feds normally means lower mortgage rates
Today, mortgage rates are at the lowest levels since three years ago
Average par rates on a 30-year fixed-rate mortgage are at the 3.5% level mark
Just a year ago, rates were at 4.75%
Nobody has a crystal ball and cannot predict where mortgage rates will go
In the last news release of the Feds lowering interest rates by 25 basis points, mortgage rates went up sharply
Some members said they want another rate cut before year-end while others stated no more interest rate cuts until next year
And next year’s potential rate cut was a maybe
With this news, mortgage rates went up sharply
This increase in mortgage rates after the Feds announced they cut rates by 25 basis points confused homebuyers. Many are in a dilemma and do not know which direction to go. The general consensus by experts is to go ahead and purchase a home today because it is the right time to buy a home.
The Right Time To Buy A Home Is When The Homebuyer Is Financially Ready And Stable
Most agree that a home is the best investment one can make.
For renters, there is never a wrong time to buy a home
Homeownership benefits renters in more ways than one
Homeowners benefit from real estate appreciation where they can gain equity over time with the combination of appreciation and paying down the mortgage
Homeowners get to deduct mortgage interest from their income tax returns
Renters do not have that luxury
Many homeowners who purchased a home in the past five years have tens of thousands in equity due to appreciating home prices
However, the right time to buy a home is not when rates are low, home prices are low, or whether or not it is a great investment
These are great factors to take into consideration. However, the bottom line is the right time to buy a home is when the homebuyer is financially ready, able, and secure.
Considerations Before Pulling Trigger In Buying A Home
The right time to buy a home is when the home buyer can take the following list of considerations and see if they are ready to become a homeowner:
Is your job stable?
Is your industry stable where if you were to lose your job that you can easily get another job?
How much home can you afford versus qualify?
You do not want to be living paycheck to paycheck where most of your monthly income goes towards your home mortgage
Do you have the down payment and/or closing costs for a home purchase?
How far are you willing to drive to and from work?
Are you planning on staying in your home for at least five years?
Will your job require a job transfer to another state or a branch location where it is beyond driving distance?
Are you planning on having a family?
Those planning on having a family should consider a single-family home purchase versus a condominium
The above factors should be taken into serious consideration when deciding on when the right time to buy a home is.
Today’s Housing Market
Homebuyers should take today’s housing market into consideration.
Homebuyers should not rush into a home purchase due to today’s record-low mortgage rates
However, mortgage rates can skyrocket
Rates are very volatile and will continue to be so in the coming weeks and months
Housing inventory is low throughout the United States with the exception in higher-taxed states
There are states such as New York and Illinois where home prices are declining and home inventory is very high
This is because of high property taxes and other taxes
All in all, if your financial situation and stability are strong, 2019 and 2020 is a great year to purchase a home. There are many new mortgage products that have launched the market such as Non-QM Loans and bank statement loans for self-employed borrowers. Asset-depletion mortgagesand no-doc investment property loanshave made a comeback for homebuyers.