These past few months have had a lot of ups and downs. Many home buyers and sellers have pushed pause on their real estate plans, opting to wait for a more stable time before making a move. However, as the country begins to reopen, many have begun to wonder about investing in 2020.
Investing in 2020: Good or Bad?
Despite a considerable amount of economic volatility over the past several months, many buyers have begun to regain interest in searching for a new home. So, bottom line; is buying a home in 2020 a good idea?
In short, absolutely. Here’s why.
Interest rates are rock-bottom low
One of the biggest reasons to make a move right now is that interest rates are lower than they’ve ever been. Since the Federal Reserve slashed interest rates earlier in the year, mortgage rates have been dropping, setting new record-lows along the way. Currently, rates sit around 3%—which is very, very low.
Low interest rates = more money in your pocket
Why do interest rates matter? A difference of 1% might not seem like such a big deal, but when you’re talking about hundreds of thousands of dollars, that tiny percent makes a huge difference.
For example, let’s say you’re financing $300,000 for your home. At a 4% interest rate, you’ll be paying about $1,432 per month, or $17,184 per year, in principal and interest. Now take that same $300,000 and finance it at 3%. Your monthly payment drops to just $1,264 per month, or $15,168 annually. That means you’re saving $168 monthly, $2,016 annually, and over $60,000 over the course of your 30-year loan!
Want to play around with different interest rates at different prices? Our mortgage calculator makes it easy.
Competition might be high
If there’s one downside to these amazing interest rates, it’s that a lot of buyers are eager to take advantage of such significant savings. That means you might not be the only buyer looking at a house, so you’ll have to be prepared to make a move if you see a home you love.
When buying in a competitive market, it pays to gain as much of an advantage as possible. Getting preapproved for a loan is a great way to show sellers you’re a serious and qualified buyer. Working with an experienced and connected local agent can also help you stay ahead of the competition.
The market is in a position to grow
When buying a home, it’s always a good idea to take a look at the local market to get an idea of what your home might be worth in a few years. Ultimately, a home is an investment—one you expect to make money on in the long run.
Investing in the Triangle is definitely smart. This area has been growing rapidly over the past few years, thanks to its expanding job market, its low cost of living, and its huge variety of educational opportunities. Economic instability has caused home values to drop a bit in recent months, but as more buyers and sellers reenter the market, it’s predicted to recover quickly.