The housing market is experiencing a cooling-off period from the boom of several years ago, making today’s economic environment the perfect one in which to buy a home. Low rates and new housing choices meaning more opportunities for home buyers. The Home Builders Association has gathered a list of questions to help consumers discover why in today’s market, now is the time to buy.
There have been a lot of stories about home prices dropping. Should I wait until prices go lower to buy a home?
The stories you're seeing about home prices dropping on the national level are from markets in booming locations such as California and along the coasts where home prices have soared as much as 40 percent in recent years. In Kansas City, housing values have increased at a more moderate pace, and continue to go up now even as some parts of the country are seeing a decline. New-home values are up more than 5 percent in metro Kansas City this year and forecast to increase again next year. If you're waiting for prices to drop in metro Kansas City, it may cost your family more money to make the move to homeownership down the road.
Why would delaying a home purchase now cost me more money later?
With new-home prices continue to go up in metro Kansas City, waiting to buy a new home simply means the price will be higher down the road. Another major factor are mortgage rates. Mortgage rates have fallen in recent months to the point where they are actually lower than they were a year ago for fixed-rate mortgages. Economic forecasters expect mortgage rates to go up in 2007, which means your buying power will be decreased -- you will have to pay more for monthly mortgage payments and will qualify for a smaller loan amount. The combination of rising prices and rising mortgage rates are a double whammy for consumers. That makes taking advantage of low rates and current prices is crucial to saving money.
Is it better to wait until the economic picture is clearer so my house will appreciate?
No. The fact is, the economy is still solid. After expanding rapidly over the past few years, economic growth is moderating – and this is actually good for housing. Most economists predict that overall GDP growth will average about 2.5 percent for the rest of the year. That means that job growth will continue to move forward at a pace that should not trigger higher inflation or interest rates. This period of moderate economic growth, job creation and low inflation, coupled with a true buyer’s market where there are plenty of homes to choose from, makes this an ideal time to purchase a new home. Kansas City has added more than 30,000 in the last two years, including more than 10,000 in the last 12 months.
Isn’t it better to “play it safe” and keep renting until things are more certain?
No. The best way to “play it safe” is to actually buy a home. And here’s why. Studies show that owning a home is the best way to builder household wealth. The sooner a person owns a home, the faster they begin to build up equity and wealth. When you buy a home, you are also purchasing price stability, knowing that you will pay the same monthly payment for the life of your 30-year mortgage. With fewer apartment rentals on the market and rents on the rise, renting lacks economic security, tax benefits and price appreciation. All of the economic fundamentals show that this a good time to buy a home and that there is upward pressure on rental apartments. The real risk isn’t in buying a home, said NAHB, it’s continuing to rent.
Should I invest my money in the stock market or use it to buy a home?
Buy a home! Thanks to the concept of “leveraging,” purchasing a home is by far the best long-term investment. Leveraging means putting down a small amount of money to earn a big return. As a homeowner, your savings continue to grown in two ways. Every year, a greater portion of your monthly mortgage payment goes to principal, reducing the overall loan amount. Second, your home appreciates over time, making it one of the very best financial investments. Not only is homeownership a stepping stone to a future of financial security, it also helps build neighborhoods and strengthen communities. It is truly the cornerstone of the American way of life, and the fulfillment of the American dream.
Should I wait to buy a home until interest rates go down further?
No. Interest rates currently stand at about 6.4 percent and are extremely favorable for buyers. In fact, they are hovering near 30-year lows. But waiting to time the market is a dangerous – and losing – game. Because interest rates are near historic lows, it is much more likely that they will head higher in the future as opposed to moving even lower. And home prices don’t necessarily move in unison with interest rates. With interest rates low, home prices down, a strong and diverse supply of houses builders offering incentives, the smartest and safest time to buy is now. Any or all of these favorable variables could change for the worse.
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HOME BUILDERS ASSOCIATION OF GREATER KANSAS CITY600 E. 103rd Street · Kansas City, Missouri 64131-4300OFFICE (816) 942-8800 · FAX (816) 942-8367
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2007 Home Builders Association of Greater Kansas City
Sunday, December 9, 2007
Friday, December 7, 2007
County Property Taxes
County Property TaxesAs taxes become due, there are many frequently asked questions. We wanted to take the time to review some of the details of paying property taxes. The county appraiser values your property every year and then gives that information to the county clerk. Your county will notify you of the newly assessed value; however, Countrywide may not be notified of the new tax information until the end of the year. Thus, your escrow account may not reflect the change in taxes until we are notified by your county. In Kansas, taxes are split in half and are due by Dec. 20th and May 10th, paid in arrears. In Missouri, taxes are paid in full at the end of the year.
Monday, December 3, 2007
The Monticello
Party for the Villas of St. Andrew's Residents
We had so much fun on Thursday, Nov. 29th with our luncheon for our neighbors at the Villas of St. Andrews. We served Smokehouse BBQ and desserts from 3 Women & an Oven. The real fun began when we started doing our drawings every 1/2 hour for some fun prizes. We had a huge turn out - thanks Villas of St. Andrews for making our party a memorable one!
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