Top 8 Reasons to Buy a Home

If you're like most first-time home buyers, you've probably listened to advice from your friends, family and coworkers, many of whom are encouraging you to buy a home. Even with all the encouragement, you may still wonder if buying a home is the right thing for you. Not to worry, reservations and stress are normal!

Just like any major purchase, the more you know the less scary the entire process will be.  Here are the top 8 reasons to buy a home right now:

1.) Pride of Ownership
According to the National Association of Realtors, pride of ownership is the number one reason why Americans yearn to own their home. It means you can paint the walls any color you desire, turn up the volume on your CD player, attach permanent fixtures and decorate your home according to your own taste. Home ownership gives you and your family a sense of stability and security. It's making an investment in your future.

2.) You can own for less than rent
As long as I have been selling real estate in the Valley, there has never been a time when you could purchase a home for as little as you can now. In some areas, homes are selling for less than they were sold for new. If you rent a single family home in Phoenix with 3 bedroom and 2 baths, you will be paying on average about $1,000 a month. That same home could cost you about $400.00 a month for the principle mortgage payment. If you can qualify for a loan, why give away your hard earned money, when you can use it to build your long term financial wealth.  (*example based on an $80,000 purchase price and does not include taxes, insurance or down payment figures).

3.) Future Appreciation
Based on our recent past, it may appear that real estate is not a wise decision. Wrong. In fact, now is the best time to buy – ever. Unless we decide to give homes away for free, the prices can not get much better! And we can all agree, once you hit the bottom, the only place left to go, is up. Real estate moves in cycles, sometimes up, sometimes down. Historically, in a healthy market, home values have consistently appreciated. The prices of homes will not stay like this forever – don’t find yourself saying “wish I would have bought back then…”

4.) Interest Rates
Mortgage interest rates are averaging around 4.875%. What does that mean to you as a home buyer? For every percent the interest rate increases, the amount of home you can afford decreases. The lower the interest rate, the more you can qualify for which increases your purchasing power. If you can only afford a $1,000 a month, a higher interest rate could dramatically change the size of home you can buy. We have all gotten use to the interest rates being “historically low” – eventually they will go up.  It’s just a matter of time.

5.) Loan Programs
Besides the great interest rates, there are some equally great loan programs available today that weren’t available a few years ago. Neighborhood Stabilization Programs, (also know as “NSP”), are handing out money to qualified buyers to use as down payment funds. Some cities are offering interest-free grant or bond money to help their communities revitalize the housing markets. Other programs that have been around for years, however, not as readily available include the Fannie Mae HomePath programs and the FHA 203K rehab loans. The evening news would like you to believe it is difficult to buy a home today – that is simple not true. There are plenty of options available for home buyers.

6.) Mortgage Interest Deductions
Home ownership is a superb tax shelter and our tax rates favor homeowners. As long as your mortgage balance is smaller than the price of your home, mortgage interest is fully deductible on your tax return. Interest is the largest component of your mortgage payment.

7.) Increased Tax Deduction Options
IRS Publication 530 contains tax information for first-time home buyers. Real estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes. If you own a home, you may actually pay less in taxes than if you are renting.

8.) Quicker Housing Recovery
I know none of us want to be that guy who buys a house today and finds out 6 months later his best friend bought the same house for thousands of dollars less. Unfortunately, I know people this has happened to. But as a long as we continue to stay in fear of the economy and the busted housing market, the longer the prices will continue to decline and the longer we will all remain on this financial roller coaster. In reality, there are fantastic opportunities which have come about because of the changes. The longer we wait for the preverbal “other shoe to drop” the worse things will get. I know its scary and buying a home is a huge decision. But if you do your homework and don’t make a decision with rash emotions, you will be ok. You have to have faith that in the long run, you will always be ok. If we all had a little bit of faith…what our economy really needs is a little faith from each of us – it’s the quickest way to recovery.