It’s important for everyone to diversify their investments. But when people hear this term, they usually think about diversifying with stocks, bonds, and mutual funds. It’s a good idea to have a hedge against the traditional financial markets and inflation by looking for other sources of wealth building.
Real estate would be one of those alternative options. Without a doubt ,this has been a challenging year with the pandemic, short labor supplies, and rising inflation. So for those who are looking to build wealth, let’s go over 2 reasons why you should consider purchasing a house now more than ever.
Mortgage Rates Are Still At Historic Lows
For those who have not checked mortgage rates recently, you will be surprised that they are still close to historic lows (According to Freddie Mac: 30-Year Fixed-Rate Mortgages Since 1971). But this will not last for much longer as the pandemic winds down and the Federal Reserve raises rates. With current low rates, it allows you to afford a home in higher price points than you would have originally qualified for. It also saves you tens of thousands of dollars over the life of the loan. Even those who already have a mortgage are refinancing their homes because of the significant difference in savings.
Real Estate Values Are Likely To Rise In The Future
Even though it’s impossible to forecast the real estate market with 100% certainty, there is a solid chance that real estate values are likely to continue to rise in the future. According to Freddie Mac, during the 2010s, new entry-level housing supply decreased to an average of 55,000 units per year, and in 2020, there were only 65,000 new entry-level homes completed – less than one-fifth of the entry-level homes constructed per year in the late 1970s and early 1980s. So because homebuilders cannot keep up with housing demand, many analysts believe that the only place the market has to go is up. As a result, those who are looking to make an investment in the real estate market should take advantage of the unique opportunity at the present time.
Diversify Investments In Real Estate To Build Wealth
Ultimately, there are a lot of challenges regarding looking for ways to build wealth right now. However, those who are able to take advantage of historic low interest rates have a great opportunity to diversity their investments and build wealth thru real estate. At Equify Lending, we will guide you every step of the way from pre-approval, appraisal, and ultimately funding the loan.