The Phoenix housing market has been a topic of concern for many, as housing prices continue to rise, and home ownership seems out of reach. With the competitive real estate market in the Valley, many may be putting off purchasing a home until the market cools down. However, with low interest rates and property values continuing to rise, people interested in setting roots in Arizona should consider buying a home now.
Here are three reasons why you should consider buying a home, rather than rent right now:
Whatever you are spending on rent, could be used to pay your mortgage instead.
Phoenicians may be opting to rent instead of buy, as competitive housing prices may lead potential buyers to believe that owning a home is not attainable during this time. In Phoenix, the average monthly mortgage payment is about $1,500 (according to Business Insider)*, compared to the average price of an apartment rental which is also about $1,500 (according to Rent Café)**. Mortgage payments are comparable to the cost of rent, and a mortgage payment offers other financial benefits such as a long-term investment opportunity, the ability to make a profit and tax deductions. Renting a home or apartment does not allow for the same financial opportunities as owning a home or apartment. Therefore, you would be investing $1,500 a month in your own home, rather than paying off someone else’s property.
Right now, there are record low interest rates on mortgages.
Currently, interest rates are at a record low, but that doesn’t mean they will stay this way forever. It is predicted that interest rates will rise by 4% in 2022, it is advised to take advantage of the currently low interest rates, before they are set to increase later this year.*** Obtaining a low mortgage interest rate can save a home buyer thousands of dollars annually, as a mortgage gets paid off. It is recommended that those interested in purchasing a home obtain mortgage pre-approval, and to have realistic expectations of the types of homes within their budget. Buyers should also be open to looking at properties below their budget, in the event of unforeseen costs or competition raising prices on homes within their budget.
Buying a home is an investment, and with the exponential growth in Phoenix, your home is likely to increase in value over time.
Now may be the perfect time to buy, as property values increase, and interest rates remain temporarily low. Buying a home can be a significant real estate investment, especially in the Phoenix market. Homes are selling at record rates, meaning that most homes purchased in the Valley will increase in value over the long-term, and when the time comes to sell, sellers will likely make a significant profit.
In conclusion, take these points into consideration to determine whether or not it is the right time for you to purchase a home.
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