The warmer months are generally considered the peak season for buying—or selling—a home. More than 85% of homebuyers who plan to buy this year will wait until the spring or summer, according to Realtor.org. “For Sale” signs have sprouted in many neighborhoods as quickly as spring flowers, but there’s more incentive for buying a home now than simply seasonality.
The current home buying climate is financially friendly, too. In fact, the best time to buy a new home may be right now.
Mortgage Rates Are Historically Low
It was only six months ago when the Federal Reserve made the decision to raise its key interest rate. Despite this increase—the first hike since 2006—interest rates are hovering around the lowest they’ve been in nearly three years! In May, the benchmark interest rate for a 30-year fixed dropped to 3.57%.
But the chance to grab a rate this low may be slipping away as financial experts predict that rates will go up. And we all know that higher rates push up your borrowing costs and your monthly mortgage payment. Chief economist at Realtor.com, Jonathan Smoke as quoted on CNN Money, said, “You are likely to get the best rate you will possibly see, perhaps in your lifetimes through the majority of next year (2016), but certainly the earlier (you act) the better.” Your window of opportunity for a historically low rate may, indeed, be right now.
Buying is Often Cheaper
There’s been a trend of rising rent prices in the U.S. housing market over the last year. In some cases, renting may better suit your lifestyle. But according to Trulia’s latest Rent vs. Buy report, for Millennials, people born between 1982 and 2004, buying is 23% cheaper than renting, on average. Surprising? It seems counterintuitive that owning a home is less expensive than renting, but it’s often the case. The report found that buying is cheaper than renting in 98 of the 100 largest U.S. metro areas.
More than ever, government-backed loans are helping prospective homebuyers, who were once under-qualified, become homeowners. Loans like an FHA Loan allow you to buy a home with a low down payment and less than perfect credit. Insured by the Federal Housing Administration, this assistance can be particularly beneficial to first time home buyers. An FHA Loan isn’t the only loan in your favor if you’re looking to pay less upfront. Consider these additional options that don’t require 20% down.
So why not give up renting and take on homeownership? To find out how much house you can buy, check out the Purchase PowerTM Calculator. Or call us at 1-800-700-9212 and let one of our Home Loan Specialists provide you with an estimate of how much you can borrow. Now is a great time to get a good mortgage. Let us help.
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