Here are the two main reasons why now is a great time to buy a home.
Is now a good time to buy? Absolutely! I could give you 10 different reasons why, but we’ll just stick to the two biggest ones for today’s blog:
Home affordability is just as strong as it was seven years ago.
The affordability index shows that the mortgage cost associated with a median-priced home in our Arizona market today is currently equivalent to the mortgage cost of owning a median-priced Arizona home back in 2014. That’s insane, especially considering the rapid rate at which home values have been appreciating.
A few years before the housing crash, an economist released a study indicating that the market appreciates by about 4% year over year on average. If you were to trace this projection all the way through 2021 and pretend that the crash never happened, the median price point would have actually been higher than it is right now. In that regard, you could say that our market is still underbought (though I know that sounds crazy to hear). So long as rates stay where they are, affordability in our market will remain strong.
What could you do if you were able to free up all the equity in your home?
Buying now provides you with an opportunity to diversify your equity.
A lot of homeowners have equity tied up in their homes right now. If you’re one of them, here’s my question: What could you do if you were able to free up part of that equity? Could you put kids through college? Perhaps you could pay off debt or start a rental property portfolio (side note: We always love helping people with the latter).
If you make hundreds of thousands of dollars from the sale of your current home, the conventional wisdom says you should roll that money right into your next one. Think about this, though: What if you could use that money to purchase a higher-priced home with a monthly payment equal to or lower than what you’ve been paying while taking one-third of your equity off the table? You’ll still have to cover your down payment, of course, but a chunk of your home’s equity could go toward savings, investing, or paying off debt. It’s a strategy that sort of feels like creating money out of thin air, and it’s completely viable in today’s market. In my opinion, not enough sellers take the time to explore this option.
Give us a call, shoot a text, or send an email our way if you have any questions; we’d love to walk you through that process and help you determine if it’s the best route for you. We’re always here to help you with any other buying, selling, or investing needs you may have. Stay tuned for the follow-up video: Now that you know it’s a good time to buy, how do you get your offer accepted?