Unfortunately with the economy and housing market still recovering, we have found that some potential first-time home buyers may be hesitant to invest in a new home.
Today’s blog will review some reasons why now is an excellent time for Millennials and other first-time home buyers to start building the starter home of their dreams.
Interest rates are low.
With interest rates at historical lows it’s easier than ever for first-time home buyers to find affordable housing options. Average weekly interest rates for a 30-year fixed mortgage remain under 4.5%.
It’s important to keep in mind that interest rates are sensitive to market forces and can change quickly. We have no reason to believe that rates will suddenly surge upward, but even a slight rate increase can push monthly payments to the point that you might miss out on your first choice for a new home.
Large down-payments aren’t necessary.
Lenders are looking more closely at borrowers today than in recent years, but there are still options for purchasing your first home without a 20% down-payment.
For example, the Federal Housing Administration (FHA) offers first-time homebuyers loans with down-payments as low as 3.5%. Keep in mind that, these loans will require mortgage insurance.
To ensure that the financing process goes smoothly, we recommend that buyers consider pre-qualifying for a mortgage and having a financing commitment in place before shopping for a new home. This allows for first time buyers to shop within their price range, by setting home cost expectations right from the beginning. Some buyers may also find that a handful of home builders have arranged favorable financing for their customers or even offer financial incentives.
New homes are built to fit your lifestyle.
Designed with today’s busy lifestyles in mind, new homes feature open floor plans, flexible spaces, low-maintenance materials and other amenities that appeal to younger buyers.
With energy costs near the top of consumer concerns, it’s good to know that new homes can be more energy efficient than ever. Innovative materials and construction techniques mean that today’s new homes are built to be much more energy efficient than homes constructed a generation ago.
Not only can they be more affordable to operate, new homes also are significantly more resource efficient and environmentally friendly.
Technology can make house shopping fun and easy.
With a plethora of mobile apps tech savvy consumers can quickly gather all of the key information on a property and to see extensive photos from their cell phones or tablets. For example, Homesnap allows you to snap a picture of any home and get all the relevant property details, including any interior photos for homes on the market.
Just beginning your search? Realtor.com is a popular app and generally contains the most accurate information gathered from more than 800 local MLSs (multiple listing services).
If you’re checking out homes in an unfamiliar area, we recommend AroundMe. This app helps you get a quick sense of the neighborhood by telling you the location of local restaurants, supermarkets, other businesses and attractions.
Owning a home can help young families build wealth and combat rising rents.
For most Americans, homeownership is a primary source of net worth and is an important step in accumulating personal financial assets over the long term. Americans have more than $10.8 trillion of equity in their homes, and for most families, home equity represents the largest share of net worth.
At the same time, rent prices continue to climb – 2.8 percent in 2013 – as rental vacancies dropped to their lowest point since 2000, according to a recent report from Harvard University’s Joint Center for Housing Studies. That makes now a great time to start investing in your future – instead of your landlord’s.
So there you have it 5 solid reasons to step out of the world of renting and consider owning your home. As always if you are looking for assistance with your home building or home finding process please contact us at 1-859-657-6700