On the fence if now is the right time to buy a home in Charlotte? You may be hearing a lot of influencers saying now is the time to buy. But as a real estate advisor I know the most important guidance is giving accurate real estate market data and knowing your real estate goals.
Let’s look at whether or not now is actually a good time for you to buy a home In Charlotte NC.
Answer these 3 questions before purchasing in today’s Charlotte real estate market:
1. Why am I buying a home?
Forget the finances, friends telling you now is the time to buy and the knockout home that just hit the market. The most important question to answer is why did you emotionally start to think of purchasing a home?
According to the Joint Center for Housing Studies at Harvard University study this year the four major reasons people buy a home are:
- A good place to raise children and for them to get a good education
- A place where you and your family feel safe
- More space for you and your family
- Control of that space
NONE OF THESE ARE FINANCIAL! What is your non-financial benefit for buying a home in Charlotte NC? This answer will be the biggest reason you decide to purchase or not.
2. Where is Charlotte’s home values headed?
The 5th reason on the Joint Center for Housing Studies at Harvard University study list, is “Owning a home is a good way to build up wealth that can be passed along to my family”
Even if you are renting you are paying someones mortgage. Lets look at how your monthly housing expense can become an investment that will build wealth over time.
To illustrate how your monthly house payments over time can build a wealth opportunity in homeownership, a nationwide panel of over 100 economists, real estate experts and investment & market strategists projected where home prices and values look to head in the next five years.
Here is what the experts projected in the latest Home Price Expectation Survey:
- Home values will appreciate by 4.1% in 2015. Charlotte has been seeing a 4.5% and Cabarrus is seeing 10% growth
- The cumulative projected appreciation nationwide will be 18.1% by 2019.
3 Year Charlotte Home Appreciation Sales Price
So what could this mean to the average Charlotte NC homebuyer? If the 100+ experts are right from the Home Price Expectation Survey’s predictions survey and you were to purchase a $250,000 Charlotte home by January 2016, that home would appreciate by over $34,000 over the next four years!
3. Where are mortgage interest rates headed?
A buyer must be concerned about more than just prices. The monthly cost of a home can be dramatically impacted by an increase in mortgage rates.
The Mortgage Bankers Association (MBA), the National Association of Realtors and Freddie Mac have all projected that mortgage interest rates will increase by approximately one full percentage over the next twelve months.
What Does This Mean as a Potential Charlotte Home Buyer? Below is a simple chart of what impact an interest rate increase would have on the mortgage payment of a Charlotte home you purchase at $250,000 today at a going rate 3.94%. If expert predictions are right interest rates will be closer to 5% by this time next year
As you can see above an increase in interest rate from 3.94% to 5.0% will cost you $217.27 more a month. Even more shocking is looking at what that looks like over the entire year and over the life of the loan!
So is now the time to be a Charlotte home buyer?
Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.
For more information and helpful tips on buying in the Charlotte real estate market download our free guide.
The fact is buying a home is an emotional decision that should be weighted in facts and knowledge of the market place. Only you and your family will know when the time is right. However if you choose that now is the time to buy, I am always happy to give excellent advice and guide you based on your information and current Charlotte NC real estate market.
Chris Carter is a licenced CPA and Broker/Owner of Carter Group Realtors. His goal is to educate Charlotte homebuyers and home sellers with up-to-date data local Charlotte and Concord real estate market trends so they can make smart housing choices and get the most house for your money.