So I ran across this great article on Realtor.com last month. It was
geared towards homeowners and explaining why NOW is the best time to a
home. But after reading the article I came to the following – OMG –
these are compelling reasons for INVESTORS to get into wholesaling and rehabbing investments deals –
NOW! Here is the article that I read and see for you self why you should be actively real estate investing:
Five Compelling Reasons to Buy a House Right Now
“Buying a house is a highly individual decision—and a local one—but
current trends are creating a favorable situation for many would-be
homeowners. Interest rates are low, employment is rising, home prices—in
most markets—are still well below their peaks, and rents are through
the roof. Every family and each individual has various factors affecting
the ability and the decision to buy a home. If you live in a market
where studio apartments are $2,400 per month—while nearby condos sell
for $300,000—it might make sense to buy a house instead.
1. Interest Rates Are Still Low
Mortgage interest rates are still low—for now.
A 30-year-fixed-rate loan now averages 4.16%, according to Freddie
Mac, but many economists believe we will see 5% rates next year. As
interest rates increase, so do your monthly payments.
A $300,000 house at 4.16% with 20% down would have a monthly payment
of $1,168. With a 5% interest rate, that payment increases to $1,288.
2. There’s More Inventory
As more houses enter the for sale market, prices stabilize.
“Inventories are at their highest level in over a year, and price
gains have slowed to much more welcoming levels,” said Lawrence Yun,
Chief Economist at the National Association of REALTORS®.
The upside is consumers now have more choices, if they are looking at existing homes.
New homes are another story: Yun says new construction needs to double its current production to meet market demand.
3. Home Prices Are Going Up
Home prices are rising.
The median price of an existing home was $223,300 in June, or 4.3%
higher than June 2013. That’s the 28th consecutive month of
year-over-year price gains, and economists expect that trend to
continue. However, we are still at least 20% off the peak prices of
2006.
“Attempting to buy a home when the market is at its lowest point—or
to sell at the peak—is tricky,” said Jonathan Smoke, Chief Economist
for realtor.com®.
He compares it to trying to time the stock market.
“You might get lucky one or two times, but overall, timing the market
does not work,” Smoke added. “It all points to purchasing power, and
that’s a reflection of price and interest rates, which will both be
higher in the future.”
4. Rents Are Sky-High
If you live in a big city, then you know rent is astronomical. In San
Francisco, many people are spending 42% of their monthly income to pay
the rent. Nationwide, rents are rising at a 4% annual clip.
It’s not unusual to see adults rooming together in expensive cities
like New York, San Francisco and Chicago, but everyone needs his or her
own space at some point.
Buying a home would lock in your monthly payment and stabilize your
finances with a fixed-rate mortgage. This is, of course, assuming you
don’t live the San Francisco area, where the average price of a home is
$1 million.
5. Employment on the Rise
Perhaps nothing is as important to the financial stability you need
to buy a home as steady employment. The U.S. economy is finally adding
jobs—about 200,000 new jobs per month.
The next generation of home buyers—the Millennials—has been
particularly affected by the nation’s job slump. Saddled with student
loans and tight lending restrictions, many in this generation have been
living with their parents to save money until the economy picks up.
If your employment prospects look good these days and the other four
factors check out, then it may indeed be the right time for you to buy a
home of your own.”
Source: http://www.reiclub.com/realestateblog/top-5-reasons-to-be-an-investor-right-now
