Now that we’ve celebrated New Year’s Eve and rung in 2016, it’s time to get started on the resolutions that you set for yourself this year. If one of your resolutions is to take the plunge and purchase your dream Chicago home, you’re in luck. 2016 is the year to buy! With mortgage rates being at a record low and the likelihood that they will soon increase, now is your chance to purchase a new home. There are many elements that are working together that make this year the best time to buy:
- Home prices are beginning to stabilize. Over the last few years home prices have been slowly increasing, but are now starting to level out. Which means that we are entering a buyers’ market. As a buyer at this time, you can take advantage of this cooling off period and negotiate a reasonable price with the seller.
- There will be an increase in the amount of homes on the market. This is due to home prices slowing down. More people putting their home on the market means buyers will have more potential homes in Chicago to choose from.
- Interest rates are currently at a record low. However, in the future the Federal Reserve will start increasing the interest rate, so potential buyers should consider purchasing a home now before the opportunity passes. Currently the rates on a home loan are remarkable low with a 30-year fixed rate home loan lingering around 4%.
- Rent prices continue to rise as well. In some major cities, a person’s rent is comparable to a monthly mortgage. In this case, purchasing a home will be cheaper than renting. In the long run, it makes more sense to put your money into an appreciating asset instead of paying rent and turning your money over to a landlord.
- One of the largest hurdles that deter a renter from purchasing a home is the down payment. Luckily, the payment doesn’t have to break the bank. There is a range of programs that can help potential home buyers. Currently, the new Freddie Mac and Fannie Mae Home Possible Advantage Program will allow a buyer to put down payment for approximately 3% even if their credit score is as low as 620.
- One of the biggest incentives to purchase a home in 2016 is the potentially large tax break that you can receive. Currently the tax laws favor homeowners. Not only are you buying your Chicago dream home, you are getting a tax break as well! Unless you have a home loan that is over $1 million, you will be able to deduct all the monthly interest that you are currently paying on the loan. And as a homeowner you might also be able to deduct home property taxes and certain home related expenses. Make sure to give your accountant all of this pertinent information when it comes time to do your taxes.
With all the factors making 2016 the right time to buy, check out your favorite Chicago neighborhoods for the home you have always dreamed of owning! Check out Chicago Real Estate Forum for the latest in real estate news in Chicago.