There are many practical reasons to own a home or trade up (or down) to your next home. Paying rent isn't likely to get you rich. Sure, there are reasons to rent, but if you're starting or have a young family, you'll surely want to build that nest egg of equity. Perhaps your family has grown in the last few years and you're feeling a little cramped. Now is the time to look at that bigger home while it's "on sale", and you can afford it with a low rate mortgage. Paying deductible mortgage interest is another that can save you thousands on your income tax bill each year. Also, aside from personal pride, home ownership gives you the right to use and enjoy your property any way you like. Build an addition, add a swimming pool, plant a garden, build a deck, paint the shutters orange...ok, I'm getting carried away but you get the idea. While you may never build a 10 foot concrete fountain in your backyard, it is yours to decide, not a landlords.
While the days of double digit annual real estate growth may be gone for a while, what makes it the right time to buy? Chances are that if you are considering buying a home, you are probably planning on staying in it for at least a few years. Well for one, with both interest rates and home prices down, it would seem like an ideal time to buy. Sure, prices may not jump up tomorrow, and they may even go lower in the short term, but even the best stock pickers and speculators in the world cant get it right. Remember you're buying a home for many more reasons than just appreciation. Fast forward 5 years when the economy recovers, rates are back up to 7%, prices are up 10-20% from now, plus your mortgage has been paying down all this time and you'll feel like a genius you bought that home while both prices and rates were down. You'll wish you had bought a few houses.
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