It’s comforting to know with the recent peaks and valleys in real estate, that affordable mortgage rates are one of the enduring benefits of pursuing a home in 2012. Just this week, rates hit an all time low of 3.89%, down from last weeks low of 3.91%. A year ago at this time, a thirty year interest rate averaged 4.71%. Much of the media has focused on the negative aspect of plunging home prices that have created a backlog of foreclosures and the abundance of short sales that are so prevalent in today’s real estate. You have to feel heart-sick for those families that are dealing with the prospects of being forced out of their home, due to loss of job or home equity.
The drop in home prices has created many opportunities for home buyers that were virtually impossible just a few years ago. Assuming buyers have steady income, a good credit score and a down payment as low as 3.5%, there are few barriers preventing a family from taking full advantage of owning a home today. In many communities nationwide, buyers are finding their mortgage payments are actually lower than monthly rent payments. Add on the tax benefits of the mortgage interest deduction and purchasing a home is a strong long-term investment.
In Davis, California home prices have fluctuated by as little as two percent over the last three years, which indicates that prices have stabilized. Real estate moves in cycles, but over time real estate has consistently appreciated. Pride of ownership is the most enduring reason why people yearn to own their home. It means you can make alterations to your home, paint walls any color you want and it offers your family a sense of stability and security. The mortgage interest deduction is a tax benefit that you can take advantage of every year, but the Capital Gain Exclusion is a benefit that can turn into a huge financial windfall when you sell your home. If you live in your home for at least two of a five-year period, you can exclude up to $250,000 for an individual and $500,000 for a married couple. There are no age restrictions and you can take advantage every twenty-four months, which means you could sell every two years and pocket your profit–free from taxation. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my other informative blogs and to view local area homes for sale in Davis, California and the surrounding communities.