Buying a home today can be one of the
most significant investment decisions you will ever make. It will not be the
same experience if you had purchased a home 10 years ago. The primary reason is
home prices and mortgage rates are the lowest they will ever be. It has been
over 50 years since interest rates have been this low (source: Federal Reserve
on the 30-year Bond). To put this into perspective; the world’s population in
1960 was a little over 3 billion (7 billion now). Neil Armstrong would set foot
on the moon about a decade later. There have been numerous wars including
Vietnam, Korea and conflicts in the Middle East. You get the point.
Since 2008, the price of homes fueled
by numerous foreclosures and short-sales has spiraled downward. I believe we
are in the recovery process but we have just turned this corner. In essence, we
are still at the bottom of the market with some ways to go. Inflation, without
a doubt, is coming. Prices are still low in certain markets however you will
see a quicker increase in value in others. I would not consider this to be normal
so you would need to perform some due-diligence.
With rates at an-all-time-low and
home prices still at very affordable levels, you have a recipe for a very
positive and favorable investment. Mortgage payments would rival and in some
cases surpass those of higher rental payments. These are all positive benefits
for the future homeowner. When you include inflation, you not only build equity
but you also increase your net worth.
With all that is happening in the
world, the crisis in Europe, the price of Gold dropping and the overall bearish
position of our stock market, I would say purchasing a home has never been more
appealing.
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