North Georgia Mountains, Real Estate, Buying Power, Interest Rates, Homeownership, American Dream
It is no surprise to anyone by now regarding what's happened in the housing market over the last several years. Yet, consumers continue to be plagued with negative news with some going as far as reporting that homeownership is no longer the American Dream. We are dominated by sensational headlines and negative sound bites regarding real estate virtually 24/7. The flip side of all the negativity is home prices on a national basis are significantly lower than their peak just a few years ago and rates are at historic lows. According to the National Association of Realtors®, housing affordability is near record highs.
The Housing Affordability Index pegged at 100 is 179.10 as of Sept. 2010 which is the latest report meaning this is an incredible time to buy. Housing has never been this affordable! And what about homeownership? In the latest survey, 85% of the respondents believe it remains critical to the American Dream. Homeownership provides stability, a place to raise families, instills pride in our neighborhoods and communities, reduces crime and builds wealth. Yes, builds wealth.
We must keep it all in perspective. If we compare home prices now to what they were at their peak, then many would more than likely disagree with me about building wealth but remember, home prices were overly inflated at the peak too. Owning a home is a long term investment, not something to be treated like a revolving line of credit. Paying down the principal along with a realistic view of appreciation means you are most certainly building wealth.
I am a firm believer in balancing emotion with logic and negativity with both sides of the facts. This is my approach when alerting my clients to buying opportunities. Many potential buyers focus on price, with little thought to interest rates and how that affects their buying power. A purchase price is mostly considered only at the the time of buying or selling. However, a house payment is something a home owner must deal with every single month for years to come. While prospective buyers are focused on the lowest price possible, they oftentimes underestimate the importance of interest rates affecting their monthly payment and buying power.
Interest rates are creeping up and 1/2% increase in rates equals a 5% decrease in your buying power?
As an experienced and knowledgeable Realtor®, I pride myself on the ability to help clients make sound home buying decisions. I can help you run the numbers, look at the facts, assess options based on your individual needs and objectives that will enable you to take advantage of the buying opportunity of a lifetime.
Consider: Whether you rent or buy, you pay for the house you occupy.