In the current culture of uncertainty, purchasing a home is a serious debate. Yet, home ownership is always a good decision when based on facts and sound reasons.
Here are four facts and reasons explaining why now is the time to purchase a home.
It is a Buyers’ Market
There is a great selection of homes on the market. Sellers are motivated and more willing to make improvements or offer incentives to sell their home, such as owner financing and covering closing costs. Many homes on the Maui market are also move-in ready, which greatly helps in the relocation effort.
Homes are priced very favorably; sellers who must sell their homes understand the market constraints. This is a big positive for buyers, for it allows for more comfort and ease to buy a home.
Low Interest Rates
Interest rate levels are at a 30-year low. Fran Mitsumura of First Hawaiian Mortgage illustrated just how favorable the low interest rates are: a loan amount of $600,000 with an interest rate of 4.375 percent would reflect a principal and interest payment of $2,996 a month.
However, many buyers are waiting for prices to drop as the market bottoms out. If a buyer were to wait several months for a $25,000 price drop on a residence, but see a 0.625 percent increase in interest rates, a $575,000 loan at 5 percent interest would return a principal and interest payment of $3,087. This change reflects a $91 increase over the larger loan. Therefore, the wait would cost $32,760 in interest over a period of 30 years, effectively canceling out the $25,000 price drop.
Real Estate is a Long-Term Investment
Mike Mandel, current senior fellow at Wharton’s Mack Center for Technological Innovation and former chief economist at Business Week, compares real estate with stock market performance: “We’ve just had the biggest boom and bust in real estate in recent history. Nevertheless, real estate has still greatly outperformed the stock market over the past ten years.” (See related chart.)
Whether you purchase your first home or a vacation home on Maui, you won’t have to rent again, and in this market buying a home is more cost-effective than renting over a long period of time. All these facts add up to one big reason to buy a home now: saving money and investing in future fun, happiness and relaxation.
Whalers Realty is prepared to make home ownership an easy and stress-free investment. With three prime locations, including Whalers Village and the Fairway Shops, Whalers Realty offers a presence that is unsurpassed on the West Side. With their proven track record of excellent service, honesty and integrity, Whalers Realty is the best choice for your real estate purchase. Contact Whalers Realty at (808) 661-8777 or via e-mail at firstname.lastname@example.org.
This chart explains the difference between real estate returns and stock market investments over the past decade.