Have you been renting for way too long, but aren’t sure if buying a home is worth the financial investment? Here are just a few reasons why the best time to buy real estate is now.
Interest Rates are Low
The average 30-year mortgage rate in the U.S. is currently just below 4 percent, and experts predict the Federal Reserve may begin raising short-term rates by the end of 2015. If you take a look at how high interest rates have reached in the past decade, it’s even clearer that there’s an opportunity in buying sooner rather than later.
It’s an Equity-Building Opportunity
This builds on the idea of taking advantage of ultra-low mortgage rates. These lead to lower monthly payments for homeowners, which is a much more serious commitment than renting—but ultimately more lucrative. Once you’ve completed the loan term, the property is yours to sell, and there’s a significantly higher chance of being able to increase your capital gain.
Since credit standards have relaxed considerably since the housing crisis, it’s actually much easier to obtain a mortgage. Another advantage is that mortgage interest is tax-deductible (as long as you itemize, of course) and some may even be able to get property tax deduction.
It’s Cheaper Than Renting
Renting a home or apartment is now more expensive than ever—as of 2015, renters spend about 30% of their monthly income on rent, while homebuyers only spend 15% per month on mortgage payments. Unfortunately, the economic climate as of late has made it more difficult for younger prospective buyers to produce down payments. When you take equity into consideration, it’s obvious that choosing to rent will put you at a loss in the long term.