Moment in time
Have you been watching the news, reading articles, or hearing your friends talk about how challenging of a market it is to buy a home right now? Well, they aren’t lying. But just because it’s challenging doesn’t mean it still isn’t a great time to buy your first home. Let’s dive into a couple of reasons why now is still one of the best times ever to get into the housing market and become a new home owner.
1. Historically Low Interest Rates
Interest rates are still at historically low levels. The interest rate is the cost of borrowing money to actually purchase your home. This cost of borrowing can also be heavily affected by your credit worthiness as a borrower. In other words, your credit score. Lenders use your credit score to determine how worthy you are of lending money to, and the likelihood that you will be able to pay them back. At the end of the day, that’s how they make money.
2. Government Stimulus
Another factor affecting interest rates is the government. Because of the COVID pandemic, the US economy virtually came to a stand still. One of the ways the government can try to stimulate investment in the economy is by lowering interest rates.
By lowering interest rates the government is lowering the cost of borrowing for Americans across the country in the hopes that they will be incentivized to buy or refinance a house.
Well it worked! Right now interest rates are almost at the lowest they’ve ever been. There has been a slight uptick in interest rates recently as we continue to move out of the pandemic and return to a more normal life. But this slight uptick compared to the last 30 years of mortgage rates is minimal.
In 2008, rates were around 6%. In 2016, they hit an all time low at the time of 3.65%. Today you can still get a rate below 3%!
So yes, while they are slowly on the rise, they are still making homeownership extremely affordable for many borrowers out there.
We cannot afford to ignore the numbers
Finally, the way that Denver is growing has been a huge benefit to anyone owning a home. While more residents moving to our state is certainly increasing the amount of buyers in the market, it is also having an extraordinary affect on home values in the area.
3. Rising Home Values
Over the last 10 years Denver has had an average annual home appreciation of 7.6%. That means if you bought a home for $500,000 a year or so later you’d have around $35,000 in equity reserves. This year we are seeing homes appreciate almost 3 times higher than that. In February annual price appreciation hit 18% in the metro area.
That means the same $500,000 house has appreciated by roughly $90,000!
This unprecedented growth is adding a ton of equity in the pockets of homeowners, which truly is the best way to build wealth for you and your family. While this is definitely expected to slow, I am sure we will still see double digit appreciation throughout the rest of 2021. Meaning, any buyers getting into the market this year, are likely to be sitting on substantial equity reserves in 2022.
Homeownership is your path to wealth
You definitely want to take advantage of all of the benefits, and wealth-building opportunity that being a homeowner in the Denver market can offer you. With the incredibly low interest rates, government stimulus payouts, and home values continuing to rise at record rates, it would be an investment well worth your while. You’ll be glad you did when you see the return on your investment in the very near future, and can build a nest egg of wealth for yourself, and your family for years to come.
Still wondering if homeownership in the Denver market is right for you, or if you can get approved for a home loan? We’re here to help! Contact your 9x Mortgage representative today to get started on your wealth building plan.
We look forward to serving you!