Is Now a Good Time for First Time Home Buying?
First time home buying can be an intimidating process, but with the right planning and preparation, it can be a rewarding experience. With the current market conditions, it's no surprise that many prospective buyers are asking if now is a good time to purchase a home. It's important to consider your own personal financial situation as well as the potential benefits or drawbacks of buying at this particular moment in time. Here are a few things to consider.
Current Mortgage Rates
The current market conditions are certainly favorable for buyers. Low mortgage interest rates, increased inventory, and potential tax benefits can make this a great time to become a homeowner for the first time. If you have been considering buying a home, now could be an excellent opportunity. According to Bankrate, current mortgage rates are currently at 6.9% for fixed-rate mortgages. This means that you may be able to lock in a low rate for the life of your loan. This is ideal timing for those who are planning on staying in their home long-term, as these lower rates offer increased purchasing power.
In addition, adjustable-rate mortgages (ARM's) are currently at 7.04%, according to Bankrate. These loans can be beneficial for those who are expecting to sell their home in a few years or have a more volatile income. With an ARM, your rate can change during the life of the loan. If you're first time home buying but plan on selling soon, or anticipate a decrease in income over time, this type of loan may be ideal for first time homebuyers.
Tax Benefits
Another perk of buying a home now is the potential for tax benefits. If you purchase a home, you may be eligible to deduct mortgage interest payments from your taxes. This can help offset the cost of home ownership and save you money over time. Additionally, many states offer tax credits for those who are purchasing a new primary residence. These credits can also help reduce your overall taxes. It's important to speak with a tax professional for specific information about available credits in your area.
Solar Panel New Build Credits
In addition to tax benefits for home ownership, you can also now take advantage of solar panel new build credits. These credits are offered by many states to incentivize individuals to install renewable energy systems in their homes. Solar panels can be a great way to reduce your energy bills and help the environment, while also potentially saving you money on taxes. In addition, many states also offer other incentives such as reduced property taxes or energy credits. Be sure to talk to your state's tax department for more information on these solar panel new build credits.
Equity Today
According to CoreLogic, American homeowners with a mortgage have seen an equity increase of 31.1% year over year since the third quarter of 2020. Equity is the difference between a property's value and the amount of money owed on it. This increase in equity is great news for those interested in first time home buying, as they can access this equity to get lower interest rates or use it as a down payment. Additionally, if you plan to stay in your home long-term, increased equity can be beneficial when you are ready to sell.
Buying now ensures you're experiencing better equity growth for your home, and you're able to take advantage of the current market conditions. With low mortgage rates, increased inventory, and potential tax benefits, now is a great time to become a homeowner for the first time.
Stiff Competition
While it is a good time to buy a home, it's important to note that the competition for homes can be very stiff in certain areas. The current market conditions have led to a surge of buyers who are vying for the same available houses. This means that you may need to act quickly or increase your offer amount if you want to secure the property you desire. Working with an experienced real estate agent can help you navigate the competitive market and find a great home for an affordable price.
First time homebuyers also have the option of working with a general contractor and having their home custom-built. This can be an ideal option if you have specific needs or want to create a unique living space that meets all of your requirements. You can also invest in newly built property, which doesn't have as many competition issues, but may be more expensive. Opting to use a custom-built home or investing in new homes can help you get your hands on a home that is perfect for you.
Huge Rental Market
Today, there are many options for renting out properties, such as Airbnb, VRBO, and other rental sites. This has led to an increase in demand for rental properties, which can be beneficial for first time homebuyers. If you purchase a house that is in a desirable location, you may be able to rent it out and generate additional income. Of course, this option also requires research into zoning laws and local regulations.
You might also be able to benefit from the current rental market by investing in a multi-unit property and renting out individual units. This can be a great way to generate additional income while also boosting your net worth.
Buyer's Market
A buyer's market refers to a real estate market where buyers have the upper hand because of an abundance of properties for sale. The current market is a great time for first time home buyers who are looking to take advantage of lower prices and increased inventory. This varies greatly depending on the area, which is why some homes have a competitive market, and some homes are considered to be in a buyer's market. Be sure to do your research and find out what homes are on the market in your area. Many home buyers have options in terms of condos, townhomes, and single-family residences, so you have plenty of choices when it comes to finding the right home for your budget.
Unfortunately, not all times are considered a buyer's market. If you notice fewer homes available in your budget or area, this means that the market is shifting to a seller's market. This can mean higher prices and less competition for buyers.
Personal Finances
While the buyer's market might be strong and mortgage rates down, first time home buying may still be out of reach for some due to personal financial constraints. Before you buy a home, make sure you are financially secure and can afford the costs associated with homeownership. This includes insurance premiums, tax payments, regular maintenance, and potential improvements.
Additionally, it's important to have an emergency fund in place when buying your first home. This money can help cover unexpected expenses and ensure that your finances stay stable as you transition into homeownership.
Now is a great time for first time home buyers who are looking to buy their first house. With low mortgage rates, increased equity, and incentives such as reduced taxes and energy credits, now might be the perfect time to take advantage of all that homeownership has to offer. Be sure to research the market in your area and consider investing in custom-built homes or newly built properties if you want something specific. Additionally, don't forget about renting out properties -- this can also be a great way to build income and net worth.
If you're interested in buying your first home, do your research and make sure you are financially secure before proceeding. Now is a great time to buy, but taking the plunge needs to be an informed decision. If you're unsure of what your options are, contact Chemung Canal Trust Company for assistance.