Fortunately, there is a silver lining to the housing market slump Americans have suffered from over the past few years – especially for home buyers. Lower interest rates, tax incentives and a market flooded with sellers has created one of the best buyers markets in U.S. history.  A flooded housing market has continued to drive real estate prices down.  Falling interest rates have also made it possible to get more “bang for your buck” providing the perfect environment for bargaining and deal-making.

Owning vs. Renting

With the economy still undergoing some of the aftershocks from its collapse, many of us are still leery of buying a new home. Renting may appear attractive on the surface but beware. Even though renting seems the safer route – it couldn’t be farther from the truth. The current economic conditions have made it less expensive to purchase a home and now more expensive to rent. While home prices and interest rates are low rent is actually going up. Foreclosures have also flooded the market with renters. Also, as more people decide to wait to purchase a new home demand for rental properties increases and raises rental prices.

Consider the benefits home ownership brings that renting does not. Equity in the property that you are living in is an important factor. Renters pay a mortgage, but unfortunately it is the property owner’s mortgage, not their own. Every month the renter pays rent, the property owner gains more equity in the property while the renter continues putting a large amount of money towards something each month that gives them no return on their investment. Along with the equity in the property the property owner gets the tax benefit while the renter gets none.

Buying New vs. a Previously Owned Home

When going to purchase a new home versus an existing home, many buyers overlook some important things to consider between the two. If purchasing an existing home, buyers should consider how well the house was taken care of previously. Many times it is hard to see some of these things on the surface.  The foundation should be checked carefully, major appliances, plumbing and HVAC should be looked at carefully. Sellers are required to disclose certain things but often do not leaving the buyer high and dry when something major goes wrong with the home.

With a new home you have the confidence that your home is built soundly from the ground up. The foundation, plumbing, HVAC and appliances are new and up to the latest building codes. Builder 10yr Limited warranties also offer buyers more peace of mind.

* This information is provided for general awareness only, and is not intended for the purpose of providing legal, accounting, financial, tax advice or consulting of any kind. Please consult with your real estate agent or tax professional for complete details.