Finally, after years of struggling through financial difficulties, things are beginning to look up. Slowly but surely, the economy is improving as confidence in the market continues to rise. Along with this rise comes the rebirth of the housing market. With all this improvement, now is the time to purchase a home! Several factors contribute to this conclusion.
The housing market has been on a steady upward trend since the second quarter of 2012. Home prices went up by 8.31% in 2012, the biggest growth the U.S. has seen since 2006. Analysts are predicting 2013 will be another great year for housing. The fact that housing inventory (the amount of time between finishing and selling a house) dropped from an average of 9.1 months to 4 months indicates a healthy recovery of the housing market. Additionally, supply is expected to exceed demand, causing housing values to rise even more.
Low Mortgage Rates
Property is generally the single largest investment a person makes in their entire lifetime. But did you ever consider the amount of money you pay on top of the price of the home when you factor in interest? Let’s compare current interest rates for a 30-year fixed mortgage (4.5%) with the interest rates of 2009 for the same mortgage (5%). Half a percentage point might seem small, but if you’re refinancing a $500,000 home with that $300,000 mortgage, here’s how it pans out:
4.5% interest rate – Monthly payments are $2,800. Entire cost of the house once it’s fully paid will be $1,008,330 with tax.
5% interest rate – Monthly payments are $2,937. Entire cost of the house once it’s fully paid will be $1,057,151 with tax.
Buying at the current low rates saves you $50,000 in the long run. That’s a nice pile of change. And don’t be fooled! Interest rates won’t stay low forever. They will likely be back up to 5% by 2014.
The Loan Process is Getting Easier
Right after the economic collapse, getting a loan for a house was extremely difficult. But fortunately for the home buyer, things have begun to take a turn for the better. Banks have been getting slightly more lax on who they loan to. Currently, banks are loaning out record amounts. The waiting process has also decreased significantly.
There truly has never been a better time to buy a house, and there’s no place to live like Seattle! For help finding the best properties around, contact North Pacific Property Management today.