Looking at home prices, low mortgage interest rates and crazy increasing rents, based on prices, mortgage rates, there may have never been a better time in real estate history to purchase a home than right now. Here are five major reasons purchasers should consider buying:
1. Supply Is Shrinking
Inventory in Metro Denver is shrinking each day. We have buyers who want to own a home and investors who want to rent homes competing in the market place. That coupled with homeowners who borrowed or refinanced their homes and are waiting for the prices to increase so they can afford to sell, continues to deplete our real estate market.
First Time Buyers are Getting Squeezed out of the Market
2. Price Increases Are on the Horizon
Prices in other parts of the country were expected to bounce along the bottom this winter. However, many pricing indices (examples: CoreLogic, FHFA, LPS, Case Shiller) are reporting that prices are continuing to rise. Actually Prices in Metro Denver are at a 5-year high. We’ve seen the bottom and are on the way up!
Denver Home Prices Near 5-year high
3. Rents Are Skyrocketing
Rents historically increase by 3.2% on an annual basis. A study issued earlier this year projects rent increases of 4% for the next two years. Trulia recently reported that rents this year have actually shot up by 5.4%.
Denver Vacancy Rate is at a 12-low
Denver rental rates are rising
4. Interest Rates Are Projected to Rise
The Mortgage Bankers Association has projected that the 30-year mortgage interest rate will be 4.4% by the end of 2013. That is an increase of approximately one full point over current rates.
A higher interest rate means less of a home for a buyer. High interest rates combined with increasing home prices will be squeezing more homeowners out of purchasing a home.
5. Buy Low, Sell High
Obviously buying low and selling high is the best plan for anyone looking to make an investment. Looking at all our sources, now is a very good time to buy a home in Denver Metro.
About the Author
Kristal Kraft
Kristal has been helping buyers and sellers in Colorado since 1984. She enjoys sharing her knowledge of the Metro Denver Real Estate market via blogging and in person while driving around the beautiful Rocky Mountain town of Denver! For fun, Kristal enjoys shooting things with a Canon. Visit Denver Photo Blog
Kristal Kraft
2 Comments
We are certainly suffering from many of the items in this article. Inventory is really tight, with homes in the trendy areas receiving multiple offers the same day they are listed. Rents are also rising with many people finding it difficult to even find somewhere to rent (at least if they want a single family home). We really need more sellers to come to the market to ease inventory.
Metro Denver renters are finding the market to be especially tight. I heard our vacancy rate is 1.7%. Landlords rule at the moment! (Great time to buy a home!)