Many first time homebuyers contemplate their purchase by looking at the past in hopes of learning a lesson from costly experiences from yesterday. There is a good reason that individuals do not buy stocks at the market bottom; they are afraid. Similarly, many people are intimidated with buying a home now even though home prices are relatively low, and interest rates are at all-time lows.
Now is a perfect time to take a breath, a step back and have another look at the housing market in the Sarasota area. Although the decision to buy can be complex in nature, often depending on your employment situation and credit rating, along with having the savings required for a down payment, if you believe in the benefits, you can find your way through the issues.
Assessing the Market for First Time Homebuyers
There are several clear indicators when the market is ripe to buy and build equity. Since fewer apartment buildings have been constructed in the past several years, the rental market has tightened resulting in higher rental rates. As the economy has started its recovery, even condo owners that were likely caught in the real estate crunch, have begun to increase rental rates by an average of 5%.
Thanks to Federal mortgages, rates today are terrific deals. However, this is not something you should expect to continue too much longer. While 20% down payment requirements were being talked about after the crash of 2007, there have been many programs getting approved that require less than 5% down for first time homebuyers and the VA is offering 100% loans for qualifying members and veterans. Simply put, the lending market is loosening up.
It’s Not too Late
Yes, home prices are creeping back up, and inventories are shrinking, but it is not too late to get a great deal with super affordable interest rates. Although home inventory is shrinking, builders are still reporting lackluster sales, which typically results in heavily discounted new home inventory. Even if you believe what happened in 2007 will happen again, you are likely to have twenty or more years before the cycle will repeat itself. In most states, foreclosures are difficult to find as the banks have finally unloaded their real estate owned (REO) properties and cleaned up their book of dead loans to make way for new loans.
If you have done research on various sites such as Zillow and Trulia; you will notice that homes are not staying on the market for long. For first time homebuyers, this means now is the time to start the wonderful process of building your equity.
Stop fretting and Pull the Trigger
Don’t let those awful memories and stories of what happened during the “market crash” of 2007 get in the way of a wise investment in the American Dream. The population continues to grow, and the demand for housing will continue to increase. Don’t think of a home as a mortgage payment, but instead a chance to build equity and the opportunity to provide an individually customized environment for you and those you love.