Is this the right time for first-time homebuyers to jump in or should they stand on the shore? The real estate market has been a wild ride in the last few years. There are areas in Florida where home prices shot up over 60% between 2020 and 2022. And for anyone who bought a home during that period, you probably had to out-bid a lot of competitors who wanted the same home.
The times are changing. Here are the recent stats:
- Median home prices in Central Florida have slightly declined over the last few months – only .9%, but a decline.
- The number of days a home stays on the market has gone way up over the last year, from 32 days to 57 days.
- Available houses to purchase have jumped 157% in the last year.
These stats point to a positive move in the market and are all good news for first-time buyers. Sellers can’t push buyers around as much. And more houses are available to choose from.
Unfortunately, there are so many other factors in the market. Interest rates hover around 6-7%. Insurance costs in Florida have skyrocketed lately (some policies have gone up as much as 300%). Inflation has eaten a hole in all of our wallets when we buy basics such as food and fuel. Reports of layoffs and general economy and world distress make us all more than a little nervous.
So should a first-timer even think about making a real estate purchase right now?
Of course, I’m a real estate agent, so I will always say “YES!”, but there are some real reasons to buy in this crazy market. Buying a home to live in will always be an investment in your future, and here’s why it is the right time for first-time homebuyers:
Your monthly mortgage payment is paying off on the principle of your mortgage. As you pay over time, your home grows equity. Equity is the difference between what your home is worth and how much you still owe. On average homes appreciate in value by 3.5 to 3.8% per year (the craziness of the last few years was very unusual). It’s like a forced savings plan. According to Forbes, homeownership is one of the surefire ways to build wealth. Here’s an article from Forbes that gives more detail.
Monthly Housing Costs Remain Stable
Your monthly mortgage won’t change over time. There may be variations in taxes and insurance costs, but the interest and principal portions of the payment never change. As we’ve seen recently, rents have skyrocketed. You may be able to purchase a home and have a lower payment than rent.
Owning a home gives you some tax savings. You can deduct the interest portion of your mortgage as well as property taxes. At the beginning of a mortgage, you pay a lot of interest, hence a larger deduction.
Stability of Ownership
You decide when it’s time to move, not your landlord. You also decide what paint colors you like and how to upgrade the property to your taste.
If you’re still unsure of where you stand financially, check out this nifty rent vs buy calculator on NerdWallet. It gives you a helpful overview of where you are at.
If you’ve decided to buy, what’s next? Getting started is simple. You’ll need to get pre-qualified for a mortgage. Call me and I can get you pointed in the right direction, including programs that might be able to help you with a downpayment.