Here Are the Top 5 Reasons You Should Buy a Home In 2011
1. Interest Rates are at Near Record Lows. With 30 year fixed loans at 4.91% and 15 year fixed loans at 4.34%, now is the perfect time to buy. Interest rates cannot stay this low forever. In fact they are expected to reach 6% by years end. If you snooze you may lose! A fraction of a percent increase on your interest rate equates to thousands of dollars lost on a 30 mortgage. Although loans are not as easy to get as they were in the past, banks are starting to loosen their grip on mortgages.
2. Huge Inventory- There were around 16,700 homes listed in Jefferson County Alabama alone last year. This is 4.1% increase over last year. The law of supply and demand states that when supply out-weighs demand, prices will fall. This is exactly what is happening. With so many houses on the market sellers have to drop prices in order to sell their homes. This leads us to the next reason to buy a home in 2011.
3. Affordability-Home prices are currently down 27% from their highs in 2006. In America the median home now sells for 177,000, a bit more that it would fetch in 2003. Median home prices in Birmingham, Alabama fell 4.3% from one year ago. Most experts agree that we are at or near the bottom. You can now buy a home cheaper that you can rent. With the flood of foreclosures on the market, one time homeowners are now renting. Again the law of supply and demand states that rental rates will rise due to increased demand.
4. Foreclosures- Foreclosures have become increasingly common in recent years. This has created a modern day gold rush for qualified home buyers. Foreclosures now account for 1/3 of all home sales. Qualified home buyers can now afford homes in ritzy neighborhoods that they could only dream about 5 years ago.
5. Tax Breaks-Although the Obama New Home Buyer Tax Credits expired last year, there are still many great tax benefits from owning your own home. Any mortgage interest paid on your home is tax deductible. This can add up to thousands of dollars of savings per year. Property taxes are also fully deductible as are moving expenses. If you work out of your home you can also write off your home office. When you decide to sell, married taxpayers who file jointly now get to keep, tax free, up to $500,000 in profit on the sale of a home used as a principal residence for two of the prior five years. Single folks and married taxpayers who file separately get to keep up to $250,000 each tax free.
With so many reasons to buy a home this year, what are you waiting for? If you are looking for an Agent, I would be more than happy to help you. You can search for Current MLS Listings on my website at: www.birmingham-realty.com.