There’s an old saying in real estate, “It’s always a great time to buy a home!” And right now, it’s really true. Here are five reasons to buy a home right now:
- The job market is good. The Bureau of Labor says the national unemployment rate in March was 5.0 percent. Average hourly earnings for all employees on private nonfarm payrolls increased by 7 cents to $25.43.
- Homes are a hedge against inflation. The Labor Department also said the consumer price index, less food and energy, rose 2.3 percent in March, the largest 12-month increase since May 2012. You may be paying more for goods and services, but if you’re a homeowner, you’re better off financially. A major asset such as a home, purchased at a fixed cost, becomes more valuable when prices inflate.
- Housing price increases are slowing. The median existing-home price for all housing types in February was $210,800, up 4.4 percent from February 2015 ($201,900), but down from the 8.1 percent year-over-year increase in January. February’s price increase marks the 48th consecutive month of year-over-year gains. Now’s the time to take advantage of better homebuying conditions.
- Mortgage interest rates are still low. In the week ending April 7, Freddie Mac reported that the 30-year fixed-rate mortgage averaged 3.59 percent, with an average 0.5 point paid to get that interest rate. Last year at this time, 30-year rates averaged 3.66 percent, so they have nowhere to go but up.
- Pent-up demand for homes is real. At the current rate of national home sales, unsold housing inventory is at a 4.4-month supply. A balanced housing market – one equally favorable to both buyers and sellers – has six months of inventory on hand. A market with under six months of supply is a “seller’s market.” Currently, there are not enough new homes being built or existing homes being listed to make prices come down any faster.
As a buyer, you could wait for better market conditions, but your Berkshire Hathaway HomeServices Kansas City Realty professional would be the first to tell you that the present market conditions are attractive. Falling mortgage interest rates, slower home price increases, and a tight supply of homes are unlikely to align for much longer.