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If you’re considering becoming a homeowner, these three reasons could convince you you’re making the right move.
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Making the choice to buy a home is a big decision. You want to ensure you’re doing it at the right time. But, how do you know when that is? Here are three big reasons why you might want to move forward this year with the purchase of a property of your own.
1. Home prices may fall
Home prices skyrocketed during the early stages of the COVID-19 pandemic. This was due to high demand caused by low mortgage rates and due to limited supply, as many sellers were reluctant to put their properties on the market.
But, many experts are predicting home prices will fall this year. In fact, Moody’s Analytics predicts around a 5% drop in prices. Fears of a possible recession and of high mortgage rates could cause demand to drop and prices to plummet.
If prices fall, you should be able to get a good deal on a home of your own. Since it can be hard to predict exactly how the housing market will do in the long term, taking advantage of a temporary downturn in prices could be an opportunity worth seizing.
2. Mortgage rates may level off
Mortgage rates have increased dramatically throughout the past year as the Federal Reserve raised interest rates. While the Fed is likely to continue raising rates at least in the short-term, it’s likely that mortgage rates won’t continue to increase at the same pace as they did in 2022, since at some point rates will become so high that lenders won’t be able to find borrowers at all.
There are also some early signs that inflation may be cooling or that a recession may be coming — and if either of those things happens to be the case, then the Fed may stop raising rates or even start reducing them again. This could bring mortgage rates back down.
The reality is, even though rates are higher right now than they were during the heart of the pandemic, this doesn’t mean you shouldn’t buy a house in 2023. Rates remain reasonable by historical standards and if you buy this year, you can always refinance if they happen to go down in the future. If they keep going up, on the other hand, you don’t want to find yourself lamenting the fact you could have gotten a better deal in 2023 when you had the chance.
3. You’re financially ready to buy
Finally, the last and most important reason to buy a house in 2023 is because you are financially ready to do so.
Homeownership is almost always a great investment if you buy a house comfortably within your budget when you are in good financial shape. That’s because when you own a house, you acquire an asset with each payment you make rather than just paying rent. Homeowners tend to end up with a higher net worth over time, thanks to the equity they acquire and the fact property values usually go up over the long term.
For these big reasons, if you are in a good financial position and planning to stay put for a while, you should seriously consider moving forward with a home purchase this year.
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