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Today more and more people are looking at the rising cost of day-to-day living and thinking that taking the leap into homeownership might not be a good idea. After all, why buy a home when you can rent a place and avoid many of the extra costs that go along with homeownership? But there are several great benefits to making the decision to purchase a house and owning a home became cheaper than renting! Because of the U.S. current economic state and the condition of the housing market, it is a prime time to get a mortgage. Today, it is not impossible to get an interest rate around 4.4 percent for a 30-year loan, down about 2 percent from as recent as two years ago. That might not sound like a lot, but in terms of what a monthly payment would look like, it would cut it down by a fifth, which can add up to some sizable savings over what people were paying in previous years. If you buy a home in mn and grab a mortgage now, it means that if inflation takes an upswing you wont have missed a golden opportunity to take a good deal. And, if the housing market continues to deflate, you can watch the going rates to see if they go down, then refinance.
The interest charged on your mortgage can seem at first like a deterrent. Why pay interest on a mortgage when you could rent, interest-free? Well, that may seem like a sound financial route to take, but did you know that that mortgage interest is income tax-deductible? Real estate taxes are also eligible for deduction, which means that that actual cost to buy a home and maintain it is a lot less than what it might seem on paper. Of course, to get these refunds you will have to do a little legwork, especially at tax time. The income tax break only becomes available if your deductions are itemized, which can sometimes be less appealing than taking the standard deduction instead. The higher your income (and the bigger your mortgage), the more valuable the breaks become. Still, a lot of people often find that the tax breaks available can make the choice to rent an apartment more expensive than to get a house.
Some recent studies have indicated that, in the long run, homeownership has beaten by a few percentage points the going inflation rate each year. What that equates to can be thought of as inflation insurance, which can be especially valuable for younger buyers, new parents, or anyone looking to the long-term future over the next few decades. Treasury Inflation-Protection Securities, or TIPS, used to provide an easy way of protecting yourself from inflation, but lately those yields have fallen.
If the economy takes an upswing and starts to grow, real estate prices will follow suit eventually. Now, that is not to say that when you buy a home it is a gateway to riches. Instead, owning a home might be an attractive way of establishing and maintaining equity. Rather than try to buy and hold onto large amounts of stocks, buying a home gets you equity, which can be a more practical way of establishing a link between a personal portfolio and the economic growth over the long-term.
The cost of renting stacked against that of owning is fairly often not that much. It might seem like a good idea to use your available housing funds for a slightly less expensive apartment versus owning, but it is important to ask, â€œWhat will I do with the money I save?â€ Rather than save that limited extra cash, most people will instead spend it. It is important to do your homework, but when you get a home, that extra money spent on repaying your principal is actually building you equity. Also, as an exercise in practicing saving, its a good one.
Todays a buyers market, and one with lots of options from which to choose. Realtors tell that the number of homes available is in the ballpark of 4 million, which is well above typical levels. Thats enough for a full year of realtors helping people get homes. And home construction isnt at a standstill. New houses are continuing to come on the market, especially as banks clear out inventory of properties sitting unsold. For buyers, it means great price, great selection.
It is easy to get a good deal. But you might have to haggle and keep patient. Since tax credits on home purchases have just expired, the number of buyers has dwindled. And prices have come down a long way. According to the Case-Shiller Index, prices are down almost 30 percent from their highest point. Now, different cities will have different degrees of pricing, as some areas have been hit harder by the housing bust. And it is a guessing game as to whether or not costs could go down further. What is important to remember is that the deals you might get compared to what you can get wonâ€™t affect your savings that much, so if you are looking to buy a home, it might be prudent to do so now.
With a population expected to grow by more than 100 million people in the next four decades, it is inevitable that supply and demand will level out. And with that many new people, it means more families looking for houses. A good deal of the houses sitting empty now will either be purchased or destroyed, and when that happens the excesses of the current housing market will have worked themselves out.
In several areas of the country, it can be difficult to find rental units that either meet your needs or that are even just that good. Decent rental properties are often just as expensive (and in some cases, more!) than outright ownership.
In choosing to own a home, you give yourself the freedom to have the home that you want. There is no need to worry about what you can and cannot do with your space because of landlords, other tenants, etc. Ownership can make coming home a better experience, not just financially, but emotionally as well.