Understanding real estate and making decisions about when to buy a new home is a daunting journey at any time. In the past six months, as interest rates have fluctuated, the decision has become more complicated.
St. Charles residents are fortunate to have all types of options within the community – from convenient rental apartments to townhomes and single family homes at every price point. At St. Charles, families have the advantage of being able to settle their children in schools and build community ties and still make smart real estate decisions.
Sabah Karimi is a contributor to Yahoo.com and WiseBread.com, which includes advice for first-time homebuyers, and she recently authored an article as part of the My Money blog for US News & World Report. We invite you to read this recent column and look for more of her blogs at http://money.usnews.com/topics/author/sabah_karimi .
7 Reasons to Buy a House Before 2014
September 19, 2013
If you've been thinking about taking the plunge and buying a home, the last quarter of 2013 might just be the time to do it.
Rates on fixed-rate loans are still appealing, and experts say it's still cheaper to buy than rent. Some financial institutions are also a little more lax with their loan qualification requirements this year.
Here are seven reasons to buy a home by the end of the year:
1. Mortgage rates are still dropping. The average rate for a 30-year fixed rate loan is 4.50 percent at the time of publication. While this is a 1.15 percent increase from the historic low of 3.35 percent at the end of 2012, it's still an attractive rate for prospective homebuyers. The housing sector is getting stronger and inflation rates are low, which promotes low mortgage rates.
2. It's still cheaper to buy than rent. If you live in a metropolitan area, it may make more financial sense to buy a home than rent a house, condo or apartment. According to a 2012 Trulia Trends study, buying a home is 44 percent cheaper than renting in the 100 largest metro areas in the United States. While this data was calculated based on last year's lower mortgage rates, there is still a significant price difference in total monthly costs with today's rates.
3. Home prices are relatively low. Housing price trends vary significantly by location and even by neighborhood, but the average housing price trends across the country look promising for prospective homebuyers. The S&P/Case-Shiller composite index of 20 metropolitan areas increased only 1 percent this past season, so 2013 could still be a great time to buy.
4. It may be easier to get a mortgage. Credit unions and banks may be making it easier for some prospective buyers to qualify for a mortgage. Less stringent requirements and qualifying criteria may help some people finally get that home loan. If you have good credit and some savings available for a down payment, you might just be able to get a loan for your dream home this year.
5. Less competition from home flippers. Investors looking to buy and flip houses can't move as quickly as they did in recent years. Housing prices in some markets are increasing, making house flipping less attractive. This gives prospective homebuyers more inventory to choose from and the benefit of having less pressure to close a deal because of another pending offer. This could be the time to enjoy the freedom of shopping around for that perfect home and making an offer.
6. Avoid the cost of rising rent. A buyer's market means it might be time to say goodbye to renting for good. If you're tired of rent increases at your current location or want to move but will experience a spike in rent, consider the benefits of buying a home instead. You may be able to secure a great rate with your credit history and end up paying the equivalent or less in monthly payments as you build equity in a home. Renting can be a more affordable option for the short term, but renters still have to face rising rental costs year after year.
7. Invest in your future. Buying a home gives you a chance to start building equity, and you are investing in your future. Even if you end up selling your home in five or 10 years, you could profit from the sale and invest that money elsewhere. If you've been dealing with rising rent or the hassles of costly moves for the past few years, settling in to a home can stabilize your housing expenses – especially if you get a fixed-rate loan at a great rate. You won't have to worry about your monthly housing expenses changing significantly for a few years, and you will pay for something that has more value than a rental property. Consider the benefits of making this type of contribution to your future month after month.