is too high are the same people who got in at 8-10%. It is not the end of the world. 4. Interest rates are not the only factor to consider – You have to also look at home prices. Home prices have been rising exponentially for the past 5 years. You are going to have to pay much more for the same house you could’ve gotten in 2016. 5. You are not alone – Everyone has to start somewhere, and if you have the means, why not now? 6. It’s a great investment – Homeownership is a great investment, not only for the potential to make money, but also for the tax breaks you get that you wouldn’t get as a renter.
If you’re a first-time homebuyer, buying in the current economic climate may seem intimidating. When I tell people I’m closing on a house in two weeks, I get looks of surprise and admiration. But why shouldn’t I be ecstatic about this?
First, let’s address the fear of missing out on lower interest rates. Waiting for rates to drop can backfire quickly. As someone who works in the lending industry, I can assure you that when rates drop, a frenzy of buyers suddenly enter the market, driving up competition, and thus prices.
For those still waiting for a crash, you’re likely going to be waiting a long time. We are currently about 4-6 million homes under built in the US, and with millennials and Gen Z entering the market, the demand for housing is only increasing. Plus, the average loan to value ratio of current homeowners is much lower than it was in 2008, minimizing the risk of another crash.
Maybe you’re afraid of the current 7% interest rates, but keep in mind that’s still lower than what many baby boomers paid when they bought their homes. It’s also important to recognize that interest rates are just one factor to consider when buying a home. Home prices have been skyrocketing in the past five years. You’re going to pay much more for the same house you could have gotten in 2016.
But don’t worry, you’re not alone! Everyone has to start somewhere, and if you have the means, why not now? Homeownership is a great investment, not only for the potential to make money, but also for the tax breaks you get that you wouldn’t get as a renter.
Buying a home in the current economic climate can be daunting, but there’s no need to be scared. Sure, you may miss out on lower interest rates or pay more for a home than you would have a few years ago. But, it’s a great investment and you’re not alone in this process. So, don’t let fear stop you from achieving the dream of homeownership.