Top Three Reasons to Buy a House Now!

Top Three Reasons to Buy a House Now!

The Real Estate Market has been through some crazy gyrations over the past 5 years, right?

Between 2008 and 2011 home prices were in a downward spiral caused by a weak overall

economy and high unemployment. The good news? That's all changed!

Over the past year or so distressed sales (foreclosures and shortsales) are accounting for a very

small portion of overall sales - a very normalized condition. It can be difficult to even find a

foreclosed home for sale in our local market. USA Today reported on November 10th the "Top 10

States where home prices are surging" and Michigan was reported 5th with an almost 14%

increase in home values over the past 12 months! If you were not aware, now your are. Real

estate values have gone up considerably! The other thing that has happened is mortgage rates are rising. Economic conditions have improved and that has pushed rates up from their 2012 lows of around 3.5% for a 30 Year Fixed to today's 4.5% 30 Year Fixed.

Rising home values combined with higher interest rates are putting a damper on home affordability and are increasing the monthly payment on the house you'd like to buy. I did a search of sales of2,000 square foot 2 story homes in Bloomfield Township for 2012 compared to 2013 and found the average sales price had risen from $238,000 to $273,000 - a 14% increase! The chart below illustrates how the combination of rising prices and higher interest rates has impacted payments:

	Home Price	Interest Rate	Loan Payment
2012	$238,000	3.5%	$855
2013	$273,000	4.5%	$1,107
Increase			$252
Assumes a 20% down payment, 30 Year fixed rate mortgage

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So, here are the top three reasons to buy a house now:

1) Real Estate Values are rising

2) Mortgage rates are rising

3) The monthly payment on your dream home is going up!

The moral of the story here is, if your sitting on the fence wondering if now is the time to either buy your first home or sell your existing home and buy a new one, then the answer is yes! Waiting longer is just going to cause you to pay more money for the new house and get a home loan at a higher rate. Now IS the right time to buy a house in Southeastern Michigan!

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