Why buy a home now? Here’s a question that has been floating around for some time with the way the market has been moving. There is a lack of inventory to choose from, interest rates are low, prices are high, so really why buy now? Whether you currently own or you’re a first time buyer this question has crossed your mind.
If you had to choose between buying in today’s market or two years ago what would you choose? I think just about everyone would say two years ago would have been ideal before the constant bidding wars and price increases. You would have gotten a great home and earned some serious market equity in twenty-four months.
Let’s say you didn’t buy and you’re considering buying now. Prices have gone up significantly in some markets, as high as 12% increase from year to year. You may not want to pay a premium for the purchase of a new home. Who can blame you? But there’s one small problem in thinking, “I’ll wait until the market cools down and the prices come down”.
If prices have gone up a fair amount in the past few years and if you’re waiting for the bubble to burst, prices aren’t going to all of a sudden come down. You’ll still be buying at the top of the market. When prices stop moving up and they become stagnant they will still be higher than what you may think the homes are really worth.
If you decide to wait for the market to come down and prices to lower you might be waiting for some time. It will take a significant amount of homes coming on the market to balance out the market. Balancing out the market doesn’t mean a neighborhood will begin to be worth less than what it was six months ago. It just means the prices won’t continue to hike up.
Why buy a home now? If you don’t you’ll still be purchasing at the height of the market when the dust finally settles. Your interest rate will be higher than what it is today. Ultimately, it will still cost you more money, up front and monthly, to buy down the road than to buy today.