This year started like most years. However, the unprecedented COVID-19 pandemic upended and disrupted many factors of our daily life. Events around the globe were canceled as the global community worked to contain a new and unpredictable virus.
While we all began the year with several plans, many of us have had to ask ourselves whether our existing plans need to be canceled or postponed. For people planning to purchase a house this year, this question remains a burning one.
Given the unpredictability of the current state of the world, is it still a good time to purchase a new home? While there are individual circumstances to consider, experts and analysts agree that 2020 can still be a fantastic time to buy a new home.
Here are four reasons why you should consider buying a new home in 2020.
Reason #1: Historically Low-Interest Rates
If you have a decent credit score, we have historically low mortgage interest rates right now. If you have a credit score above 760, you can qualify for a mortgage rate as low as 3.301% APR on a thirty-year fixed mortgage. To put that into perspective, you could purchase a home with a value of $200,000 and only pay $876 each month.
Generally, rates this low don’t last for long. If you have decent credit, this presents a unique opportunity to lock in an insanely low rate until your home is paid off. These low rates make it possible to consider upgrades that might not have been financially viable before.
With these low rates, it might be more feasible to purchase a fixer-upper, because you’ll have more available money each month. There are so many beautiful houses on the market that just need a little TLC, but prohibitive rates have made purchasing those homes a financial mistake. However, now, you can comfortably accommodate the cost of quartz countertops, hardwood floors, or solar panels, since these lower rates will give you more revolving capital.
Reason #2: Rising Home Costs
While we’re in an economic downturn, experts and analysts are quick to point out that this is very different from the 2008 recession. The housing market has remained relatively unscathed, and there aren’t any signs of it pummeling out at this point. As a buyer, you won’t have the dirt-cheap house prices like we saw in 2008. However, this could be a fantastic thing for you in the long run.
Experts are predicting that home values will continue to rise, despite the economic impacts of the coronavirus. This is because we currently have fewer homes on the market than there are buyers. If you’re able to snag a house up at the low mortgage rates, your home will continue to increase in value over time.
This will allow you to gain home equity and increase your home’s value simply by purchasing at a time when rates are low, and housing prices are rising. Just because house availability might be limited, doesn’t mean you shouldn’t buy. Instead, it presents an exciting opportunity to build your own custom home. This alternative ensures you get a house that you love at a rate that can’t be beaten.
Building your own home also allows you flexibility in terms of designing from the ground up. So, if you’re interested in the energy-efficiency of concrete block homes, you could build it yourself instead of trying to purchase one out on the market.
Reason #3: Stability
All this talk of uncertainty makes the desire for stability really high. Owning your own home provides a nearly unmatched level of security. You truly take the power of shelter into your own hands. This benefit is especially relevant if you currently rent. Given the current economic climate, your security as a renter is directly proportional to your landlord’s financial security, because if they fail to pay the mortgage, and their house is foreclosed, you could be out of your home at no fault of your own.
Beyond that, securing a home loan at a low-interest rate also provides long term stability by ensuring that you aren’t overpaying on a mortgage. If you can secure a low monthly housing payment, you can set yourself up for long term financial stability.
Building home equity also helps create a financial cushion, which, as we’ve seen in the last several months, can be a lifesaver.
Reason #4: Customization and Freedom
Aside from all the time-sensitive benefits, owning a home presents an array of other benefits. Think about all the reasons you want to own a home or buy a new home. When you’re the owner, you have the final say in the design and look of the house.
If you want composite shingles instead of asphalt shingles, that’s not a problem! If you want to paint the walls crazy colors, that’s totally fine. If you want to have pets, you don’t need anyone’s permission. Owning a home comes with so much freedom and flexibility.
If you already own a home or are currently in a mortgage, but you wanted to buy a larger home or a house in a new area, those benefits to moving still exist. Purchasing a home now allows you to be in that dream home you’ve always wanted.
Consider Purchasing a Home In 2020
Despite the calamity of the world right now, it can still be a fantastic time to purchase. As long as your credit score is in decent shape and your job is secure, there’s no reason not to move forward with your plans to purchase a home in 2020.
Matt Lee is the owner of the Innovative Building Materials blog and a content writer for the building materials industry. He is focused on helping fellow homeowners, contractors, and architects discover materials and methods of construction that save money, improve energy efficiency, and increase property value.