First time home buyer's look to cash in on american dream
In this article, we will cover three primary reasons that first time home buyers and repeat buyers are looking to buy a home. Every great consumer's goal is to stretch their investment and get the best possible value that they can. The next twelve months within the Atlanta Real Estate market will undoubtedly see some changes. Content of this article are NOT based upon theory; they are based on factual data of the nation's leading experts.
1. RENTAL RATES SKYROCKET- Atlanta rental rates have risen exponentially over the past seven years. The graph above is a national chart based upon rental rates across the country. Many Atlanta tenants can't come close to finding and $850. one bedroom apartment rental, much less a detached home rental in good condition. One of our past clients this week, called to buy a new home. He had plans of moving cross country but the plans fell through. He moved into an apartment in Alpharetta for $1600. per month, frustrated also with apartment life. Qualified for a townhome that suits his lifestyle for approximately $1,000 per month and approximately $150. per month in HOA dues. This is a savings of $450. per month, $5,400.per year and he gets to enjoy the benefits of home ownership.
2. INTEREST RATES ON THE RISE- Interest rates are the number one mismanaged variable of the home buying process. For an example, paying 1/2 of a percent too much will cost a home buyer $25k-$30k over a 30 year loan in interest alone. Based upon the chart from the Fannie Mae, MBA and NAR; interest rates are expected to climb 4/10 of a point. Which doesn't sound much but in real money it could be $10's of thousands of dollars through the life of the loan and higher monthly payments. Rising interest rates also effects the amount of loan that home buyers qualify for, a 1% increase takes away 10% of a buyer's buying power. Being that at 4%, a buyer would qualify for a 300k home, at 5% they would qualify for only an approximate 270K home. Meaning the buyer gets less home for more money.
3.ABOVE AVERAGE APPRECIATION- The projected annual appreciation throughout the country in 2017 is 4.7%. In specific markets within Atlanta, the number may end up being double that number or more. Many Atlanta home sellers that bought within the last couple of years are cashing in their equity and either upgrading, down grading or moving out of state. New home buyers are also getting in the mix to build equity before the appreciation rise cools down. In a healthy real estate market, the average annual appreciation is 3.6%. As you can see, buyers look to get in before appreciation slows down. Based upon a 300k home at a 4.7% interest rate, the annual appreciation would be $14,100. Again some micro markets of Metro Atlanta are seeing 9% or more.
The Compound Effect of these three areas, has buyers flocking to lock in on their dream home before it is too late to get the best deal. It is possible for one of these areas to project out a little differently than the projections. This could be an Interest Rate hike a great deal more than expected or appreciation rise less than expected. There are other factors that are to be considered while investing in your first or next home. The Atlanta and national real estate market and industry is always changing and evolving. Be sure to hire an Expert Advisor while buying a home. They will be current in all of these indicators and many other indicators that will be useful while achieving your goal of the American Dream of home ownership.
For more useful information, go to the Ultimate Home Buyer's Guide ,text/call 678-644-6944 for any questions or a Free Consultation.
To contact Tracy Cousineau, go to TracyCousineau.com or text/call 770-378-3161