The Austin/Central Texas area has gotten a lot of national press lately about being one of the most sought-after places in the country. With a net gain of 159 people per day moving into the Austin area, we’re one of the fastest growing metro areas of our size in the nation. Depending on your perspective and position, that can be a good thing or a bad thing.
It’s no secret that the real estate market here is red hot, and prices are rising. Many younger people and renters are feeling squeezed, as rents and occupancy rates are rising, forcing many to pay more and more of their monthly budget toward housing.
Local Austin expert Jonathan Sempsrott of Keyrenter Property Management states that the average rent in Austin is approximately $1,750 per month, up 3-5% from 2016. Occupancy rates are now 94%, with renters scrambling to find availability and landlords able to cherry pick their tenants and rental rates.
Now is a great time for renters, first time home buyers and investors to take advantage of the many benefits of owning real estate. For the same $1,750 average price of rent in Austin, you could make the payment on a $225,000 home with a small 5% down payment!
Here are just 3 great reasons to consider buying a home now:
- Make the rising prices work for you, not against you: By owning a home, rising values will be working for you. You will be building equity in your home as the values go up, while being able to protect yourself from rising rents. Owning a $250,000 home that appreciates 5% per year will build equity of $12,500+ per year! Whether you are buying your first home, a vacation home or an investment property, this equity appreciation will yield great returns over time.
- Interest rates are good right now, and may be heading up soon: Average 30 year fixed mortgage rates are in the 4% range for borrowers with great credit. This is excellent and very low compared to historic levels. With a growing national economy and stock market, mortgage rates are poised to rise by the end of the year. Major national bond market buyers Fannie Mae and Freddie Mac have indicated they may begin to slow down or stop buying mortgage-backed securities in the near future. As they now buy $20-40 billion per month, their slowing or exit from the market could translate to mortgage rates rising .375-.5% by the end of 2017. Locking in on a low fixed rate mortgage will protect you against rising rates and housing costs
- You may not need as much cash as you think you do to buy: I have talked with many people who think they need 20+% cash to buy a home. Unless you are an investor buying a rental property, this is not the case. We have many low down payment mortgage options available, including zero down options for military veterans or those that want to live just outside the city limits. We have conventional and government financing options with down payment options as low as 3-3.5%, and some of these programs allow for family members to help you with the down payment. There are creative ways to have some or all of your closing costs paid for you, and ways to minimize the total cash investment of getting into a home.
For these and many other reasons, now is a great time to buy real estate!
Give our office a call for a free, personalized assessment to find out what options are available to you. My team and I look forward to helping you and those you know in any way we can.