Nationally mortgage rates have been hovering at all time lows, 4% on a 30 year fixed mortgage, means it is incredibly affordable to purchase a home. First time home buyers have excellent tax incentives and Trulia reported that in 98 out of 100 American home markets, owning is now cheaper than renting. Further, the rate of joblessness is down, meaning more people have the income to own a home. In 2011, investors increased their purchasing of homes by a whopping 64%, due largely to the fact that home prices are down 34% from 2006 at the height. Currently, those investing in homes, are able to rent them out for more than the mortgage price. This trend will not last and currently, the inventory is decreasing rapidly, especially in our market in Miami Beach. Very real opportunity for investing in real estate and making gains is upon us, and analysts believe what is holding people back is not the fundamentals of real estate or the news, rather, it is psychology of those who were injured by the crash.
Recessions are not necessarily bad for everyone, in fact, the shrewd investor with the right team, can benefit tremendously from this period of time. Unfortunately 1/30 Americans lost their job in the recession, however for those who remained gainfully employed, the sustained low interest rates make home buying and investing incredibly affordable. The Wall Street Journal gave this statistic recently that puts these numbers into perspective for the laymen, American home buyers can borrow for 30 years at a rate cheaper than either General Electric or the entire Australian Government. Further, borrowers are able to lock these rates for the duration of their loan, secure in the price of future payments. Those who have never purchased a home are in a remarkable situation and have come out on top. For more information on benefitting from this fertile market, and for advice on the homes and condos that would most likely appreciate or for investment opportunities, contact us today!