Potential home buyers wrestle with a common problem: when to buy. There are many in the millennial age group who want to own a home, but have not moved forward in that process for one reason or another. The question is, why? Interest rates are near all-time lows, and while they are rising they are still not on pace to eclipse rates pre-recession. There are lots of arguments for not jumping into the market, but as you will see, those arguments don’t hold up when you examine the reality of the situation.
Prices are High
The most common argument is that prices are high and millenials don’t have the money to buy into a home. Using FHA and special home buying programs, the reality is that first time buyers with good credit have many options. Prices are high, but they are climbing. Buyers who wait will find the properties they wanted at even higher prices when they consider themselves “ready” to buy.
The rising prices also have a flipside that works out to be a net positive for the buyer. If you purchase a home with a price that goes up, you get instant equity. That is just like having money in the bank, which you can use to make renovations to your home.
Know the Risks
Just because median prices are rising, doesn’t mean your home price will rise. However, real estate has historically been one of the best ways to hold money over the long term because it appreciates well in value. If you don’t see the short term gains you want, you at least have the benefit of lower rates than you would when the market turns.