Is It A Good Time To Buy Real Estate?
Many individuals may find themselves grappling with the current state of the real estate market, facing internal conflicts about the wisdom of making a purchase. We're here to set the record straight: There are compelling reasons to consider buying a home, particularly when you consider the long-term advantages. We’ve answered some of the most common concerns for homebuyers below.
“High Interest Rates Are Holding Me Back”
Mortgage interest rates are notorious for their fluctuations, especially over the last few years. They are a factor of many things, such as economic conditions, inflation, supply & demand, credit history, and loan terms. This has made some afraid of buying a home in this current market. If you find yourself in the same dilemma, we have two interesting statistics to share!
Think about all of your high interest debts; this could include credit cards, student loans, personal loans, etc. How much do you pay towards these debts per month? Mortgage interest rates are still significantly lower than many high-interest liabilities such as credit cards, which have skyrocketed to an average of 28.15%, according to Forbes. After purchasing a new home, you may be able to access any equity available after a few months' time to consolidate high-interest debts into your monthly mortgage payment and potentially save hundreds of dollars per month.
According to the National Association of Realtors (NAR), the average age of an American homebuyer is 36 years old. Interest rates in 1987 were an average of around 10.40%, and even more in the early 80s. Interest rates ebb & flow, and many economic researchers believe rates can move in either direction within the next few years depending on market conditions.
While we cannot predict the future of interest rates, it may be a good decision to lock in your rate now to guard against potential increases in the near future. With our SimpliFi Program, we give homebuyers the flexibility to refinance their mortgage without incurring lender or administrative fees if rates decline.
“It’s Too Expensive To Buy”
In most housing markets around the nation, it is more expensive to buy vs. rent. But if you think about it, not only are you paying your landlord’s mortgage, but you’re also helping them gain potential home equity. Home equity can be used for many things, such as paying off high-interest expenses, establishing an emergency fund, or even launching a new business venture. So, buying a home now could absolutely be worthwhile in the long run.
Don't worry if you lack the immediate cash for a down payment or closing costs. We offer a variety of down payment assistance programs designed to assist individuals in your situation, making it easier to overcome this financial hurdle.
“There Will Be A Foreclosure Boom Soon”
We’ve heard this phrase time and time again: “I’m waiting for the housing bubble to pop.” An event like this would only happen if huge percentage of homeowners were delinquent on their mortgage payments. Even though interest rates & home prices are climbing, homeowners are staying on top of their mortgage payments. In fact, CoreLogic announced that the overall U.S. delinquency rate remained at a historic low of 2.6% in June 2023. As a result, it would be very unlikely that a foreclosure boom will happen in the foreseeable future.
“I’m Waiting The Housing Market Out”
While patience may be a virtue in many aspects of life, it is rarely the case with the housing market. Just in the last three years alone, we’ve seen national home values increase by over $82,800. That’s more than a 26% increase! By waiting, you could be losing that sweet, sweet home equity that could prop you up financially. Rates could also go up, making your mortgage payments higher. Buy that home that you love now before it’s too late.
In conclusion, we do think that it’s still a good time to purchase real estate. Whether you are a first time homebuyer or a homeowner with years of experience under your belt, we strongly recommend consulting with a local Castle & Cooke Mortgage loan officer to assess your specific situation & see if buying a home would be right for you. We’re here to help you every step of the way!
Sources:
https://www.bankrate.com/mortgages/historical-mortgage-rates/
https://www.thezebra.com/resources/home/average-age-of-first-time-homebuyers/#:~:text=In%202022%2C%20the%20average%20age,NAR%20started%20tracking%20the%20metric
https://themortgagereports.com/61853/30-year-mortgage-rates-chart
https://www.foxbusiness.com/personal-finance/annual-mortgage-delinquency-rate-increases
https://www.forbes.com/advisor/credit-cards/average-credit-card-interest-rate/
https://www.bankrate.com/real-estate/existing-home-sales/
*Interest rates, program qualifications and offerings are subject to change without notice.
Down payment assistance is offered and provided by third-party Entities and are dependent upon that Entity’s set of regulations, restrictions, and qualifications to govern the distribution and any potential repayment of those funds. Castle & Cooke Mortgage, LLC is not responsible for non-qualification by an applicant, nor funds availability, from the providing down payment assistance Entity.
