April 30th, 2010 brought the end of the window to buy a home and receive the home buyer tax credit for most of us (certain military members have an extra year to buy.) There are, however, compelling reasons to buy a home despite the expiration of the credit.
1. Affordability is at an unprecedented high. Long & Foster has prepared a video on the Housing Affordability Index which explains why the current conditions are the best since 1971.
As you can see in the video, low mortgage rates and moderate housing prices have combined to make this one of the best times to buy in recent history.
2. According to a survey of 224 renters on ApartmentRatings.com, rents in the Roanoke, Virginia area have risen by more than 30% over the past 2 years. Yet housing prices have dropped. Mortgage rates are excellent. This could be the “perfect storm” for buying rental properties!
3. Move-up buyers can make out well. In a hypothetical example, lets say that house values have dropped by 8% (this varies by area, hence the hypothetical.) A $180,000 home sells for $165,5600, due to the 8% drop in values. Those sellers move up to a $220,000 home, but pay $202,400 due to the 8% market drop. The sellers lost $14,400 on the home they sold, but saved $17,600 on the one they purchased. In effect, they came out $3200 ahead! Of course, results vary by situation, but this market can be a great time to move up.
4. You’re not buying a tax break; you’re buying a place to hang your hat. A tax credit can’t give you shelter from the storm, memories of holiday dinners, recollections of laughter and love, or the joy of coming back each evening, to that very special place called home.
