Why You Should Buy A Home Now
There’s an old saying in real estate, “It’s always a great time to buy a home!” According to Realtor.org, there are many reasons to buy a home, beginning with federal tax benefits that allow you to deduct mortgage interest, property taxes and some costs involved in buying a home. You’re allowed to exclude up to $250,000 as a single filer and $500,000 for married filers in capital gains when you sell your property.
There’s also building equity, or your share of ownership, by making your monthly payments, improving your home with upgrades, and through your home’s appreciation in value over time. Between 1972 and 2014, median single-family existing-home sale prices have increased on average 5.2 percent each year, this despite the worst decline in home values during the Great Recession and recovery.
The stability of home ownership helps you become a part of the greater neighborhood where you and your family build relationships. It’s nice to have the local grocer greet you by name and for your kids to grow up with familiar faces at school, church and extracurricular activities.
When you make your mortgage payments with a fixed rate, your housing costs remain somewhat predictable. Your payment doesn’t go up, but you may have fluctuations in operating costs, like hazard insurance, homeowner association (HOA) fees, electricity, water and gas. Your property will be reassessed at a higher value, and you’ll pay more in property taxes. But you’d be paying these costs anyway in higher rents if you were a renter instead of an owner. With a fixed payment, a key portion of your housing costs remains the same, allowing you to save more money to apply to your mortgage, pay for college, grow your family, or other choices.
Along with stability, comes freedom of choice. You can do what you want in your home within reason – paint the walls any color, replace the carpet when you feel like it, decorate how you please, and make structural changes to the property such as adding extra rooms or a swimming pool.
Financially, it’s a good time to buy a home. According to Forbes.com, economists predict a burgeoning economy for 2021 following the devastating job and business losses of 2020. In addition, employers will expand jobs, many of which can be performed at home. Spending will increase because the COVID vaccines will provide more confidence to consumers.
Pent-up demand for housing will continue, but what may change is that homebuyers will seek homes further away from expensive city centers as more workers can perform their jobs remotely. This means that what makes a location desirable may increasingly favor suburbs, exurbs and small towns near big cities where homes can be purchased for less and living is quieter.
As a homebuyer, you could wait for better market conditions, but your Berkshire Hathaway HomeServices network professional would be the first to tell you that the present market conditions are attractive, largely due to rock bottom interest rates.
To maximize your investment, choose a home you’ll be happy with for years to come, as the longer you remain in it, the more equity you’ll build.