5 Reasons To Buy Your First Home – NOW!
These are the Top 5 Reasons to buy a home in Minnesota at this time:
- Prices have come down from all-time highs in 2005-2006. Almost every market in the country has declined in the past few years, and although prices may fall further still, we’ll never know until they’ve started coming back up. Factoring in prices and income rates, now is the most affordable time to buy a home since the 1960’s.
- Interest Rates are still near record lows. Back in the 1980’s interest rates were around 15%. YES, 15%! Looking at a 6, 7, or even 8% fixed interest rate may seem like a lot to some of us younger buyers, but compared to rates of old, this may be as low as they go EVER.
- Foreclosures are running rampant right now. It’s no news to you that tons of houses have been retaken by banks since the loans people were in had higher adjustable rates. Buying a foreclosure in Minnesota can be done very easily and with less hassle than you think. 75% of the First Time Home Buyers I’ve worked with this year have bought bank-owned homes. These are usually the cheapest homes on the block, and if you have a little extra cash or can fix a few things yourself, you can gain a lot of equity within the first year or two after buying.
- Appreciation is a sure thing. For everyone that says “the sky is falling”, in a few years they’ll be exclaiming “we’re back on top!” so don’t listen to the media or the masses. We’ve come down the past several years, and that was probably foreseeable for all the action we had in 2000-2005. But over 60 years, the annual average appreciation rate in Minnesota is about 5-6%. If you buy now and hold your house for 5-10 years, you will come out ahead.
- Rents are going up, due to a lot of people getting foreclosed on. There is usually a time period of 2-4 years after a foreclosure on your credit report, in which you won’t be able to obtain a loan. Since so many people have gone into foreclosure, they cannot buy for a few years. So where do they live?? Apartments and Homes for rent. Landlords and Investors know this fact, and are increasing rental rates accordingly. If you can afford your rent right now and don’t have any big blemishes on your credit history, you’ll be better off owning your home. Besides, at the end of your rental period what do you get? Nothing. Owning has it’s perks, so get educated and see if buying your first home is a good choice in this buyer’s market.
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You are so right when you talk about the opportunity for renters to buy now–especially when rents are going up because all of these foreclosures are making new renters. The deals that are out there right now are amazing. I wrote an article at http://www.TheMortgageScoop.com a few weeks back about a new program that give first time home buyers in MN money to buy and fix up foreclosed homes in the Twin Cities. We need more people to take advantage of loans like these and ones with down payment assistance too.