Chicago Relocation
 

Now is the Time for Buyers to Invest

August 14, 2012

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John D’Ambrogio

The current low point of the housing market is proving to be a great opportunity for home buyers to invest in their future, according to an article by economist Lawrence Yun. A new trend shows that more homeowners are buying their home to live long term rather than buying to flip when the time, and price is right.

The trend of buying not flipping is good for the market and is already starting to show an impact. This year’s first quarter was the strongest the market has seen in 5 years resulting in confidence that considerable growth for both seller and buyer traffic will continue.

Buying a home now is not only smart because of the housing market’s low point, it is also smart because as the market and, subsequently, housing prices rise the overall net worth of homeowners is predicted to rise as well.

Traditionally, the gap between homeowners and renters net worth is substantial. In fact, studies show that buying a new house will pay off for the homeowner on average after three years. That study, by Zillow,  accounted for inflation, factored in rising rent prices, housing affordability, low mortgage interest rates, property taxes, maintenance and more, and found that the overall cost of switching to home ownership now will benefit buyers within just three years thus, resulting in a higher net worth.

It should be noted that while market signs and predictions illustrate an improved future, there is nothing that indicates that homeowners’ net worth will return to the highs of the pre-bubble burst. Still, no matter which way the market may turn, the value of owning a home is continually expected to be vastly higher than renting.

Bottom line: Now is a time for action. Look into buying a home as an investment in your future.

 

 

Some comments from Baird & Warner Intern Elizabeth McGrath