Put your Housing Cost to Work for You
BY NANCY BIERENGA, REALTOR®, E-PRO, ABR, éLAN REALTY, PAST PRESIDENT, WEST MICHIGAN LAKESHORE ASSOCIATION OF REALTORS
You can pay a mortgage or you can pay a landlord.
Prices Will Continue to Rise. According to those who closely watch the market, home prices in most areas have appreciated by at least 6.2% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.1% over the next year.
Home values will continue to appreciate for years. In spite of growing thoughts that the economy could go into a recession later this year, the low supply of homes already on the market and those being built will cause the old law of Supply and Demand to keep prices increasing. Waiting no longer makes sense.
Mortgage Interest Rates Are Projected to Increase. Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have already increased by half of a percentage point, to around 4.5% in 2018. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by half a percentage point to around 5.1% by this time next year.
An increase in rates will impact your monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.
Either Way, You Are Paying a Mortgage. There are some renters who have not yet purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s. The money you pay is either increasing your net worth or your landlord’s.
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As an owner, your mortgage payment is a form of “forced savings” that allows you to build equity in your home which you can then tap into later in life. As a renter, you guarantee your landlord is the person building that equity.
Are you ready to put your housing cost to work for you?
It’s Time to Move on with Your Life. The cost of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.
Now is the perfect time to invest in yourself!
Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.
Nancy Bierenga, of élan Realty, is past president of the West Michigan Lakeshore Association of REALTORS®, a member of the National, Michigan, and West Michigan Lakeshore Associations of REALTORS®, and the Greater Muskegon Woman's Club. She is an Accredited Buyer's Representative, a Certified e-Pro REALTOR®, and a Certified Fair Housing REALTOR®. She and husband Robert have lived in Muskegon since 1996. Phone Nancy at (231) 730-0887, email Nancy@HousesByNancy.com, stop by élan Realty's office at 4075 Airline Rd., Muskegon or visit the élan Realty on Facebook here.
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