As the year is coming to an end, you are still thinking whether to buy this year or wait for next year. You know you want a house, just making up your mind is difficult. Here are some thoughts that could help you decide:
1. Tax savings
You can take deductions for mortgage interest, property taxes, and interest cost if you close by December 31. In the early years of your loan when you’re paying off a lot of interest, these deductions can be significant.
2. Motivated sellers
Sellers who are looking at buying another home are highly motivated and want to take the benefit of tax savings on their next home purchase. Just yesterday my clients and I were able to negotiate such a deal where the sellers accepted a lower bid. Even if you are not able to get the seller to take below asking offer, you can still get a great deal, without much competition.
3. Interest Rates are rising
Last August, rates on 30-year mortgages were low bottom at 3.55%. The Federal Reserve decided finally to raise its key interest rate; mortgage rates have been climbing slowly. The average rate today is just above 4%; we don’t know what they could rise to next year.
4. Builder incentives
If you are looking at buying a new construction, there is an excellent chance of getting incentives from the builders as they are looking at ending their fiscal year high. There is a lot of power to negotiate the upgrades, appliances, etc., though the builders will never decrease their asking price. Some builders do come out with their end of the year clearance sale for move-in ready homes.
5. Availability of movers
In summer many moving companies are booked six weeks or more in advance. In the fall and winter, it’s usually easier to book the services of a moving company on shorter notice.
6. Paying toward your own home
When you rent, your monthly check goes towards something that you never see any returns on your money. On buying a house, your monthly mortgage payment goes toward an investment—and ultimately a home that’s yours.
7. Freedom to renovate
Whether it is replacing your carpet or modernizing your kitchen, painting your home’s exterior or interior’s, change your fixtures; you do whatever inspires you, without anyone telling you, “No!”
8. Home prices are still increasing
If you buy now, as the home values increase, so does your rate of equity. We don’t know how high prices will rise and how long they remain high, we yet have to see that ceiling.
