Hundreds of Americans were hit hard with the mortgage crisis and the downturn of the economy. Many families were no longer able to afford their mortgage payments because of high umployment and subprime mortgage rates. However, there is a silver lining in this dark cloud as there are benefits to buying a home in a bad economy. Here are some benefits that can make buying a home in a recession an attractive investment.
- Low Interest Rates
According to Freddie Mac’s weekly primary mortgage survey for the first week of March 2011, the national average interest for a 30 year fixed-rate mortgage was 4.87 percent and 4.15 percent for a 15 year fixed-rate mortgage. These interest rates have been on a consistent decline for almost a month. With these rates you can lock-in an affordable mortgage payment before the economy becomes a sellers market.
- More Affordable Prices in Affluent Neighborhoods
The foreclosure crisis has affected even the rich. Many affluent neighbors all across the country in suburban towns near cities like San Francisco, Washington D.C. and Chicago, have homes availalbe for prices way below market value. A local Chicago brokerage owner Paul Stepanovich said that “the foreclosure crisis has crept into the homes of affluent households as big corporations laid off their top executives.” Now may be the perfect time to purchase your dream home in that wealthy neighborhood you always had your eye set on.
- Good Market for Lanlords
If you have the cash or good credit rating, purchasing a home up for foreclosure or auction is the perfect opputunity to become a landlord and earn extra income. Since it’s still a buyers market, the best thing to do is to rent or lease your property and sell when the market improves.
With benefits like these, you can make good use of a bad economy to be your stepping stone to affordable home ownership and prosperity.