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Homes and Lots For Sale • Home
Buying Seen As Safe Investment
Recipes
and Home Tips • Employee
Profile
By John Hagan
Ranking Investments: Homes top the list
Source: 2002 Fannie Mae National Housing Survey |
Over the past couple of years, we have all seen the volatility of the stock market. We have all heard story after story in the news about failing businesses, less than desirable earnings reports, and weak economic indicators. However, we also continue to hear that the housing market is as healthy as its ever been. Month after month, records are being broken for housing sales and new home construction starts.
Why this trend in home building when the economy is in such bad shape? The answer is simple: buying a home is seen as the clear-cut best option when ranking investment choices. Of course the fact that interest rates are at the lowest levels in many years doesn't hurt either. Why would you not want to invest in something that has historically always gone up in value even in weak economic times? Better yet, not only can you invest your money but you can also invest someone else's money borrowed at an extraordinary low rate. Furthermore, you can write off the interest you pay on your taxes.
"Home values nationally have never shown an annual decrease while average
stock prices have plunged more than 30% some years," says Gary Garczynski,
President of the National Association of Home Builders. "For home values
to decline dramatically, the cost of building a new home, including labor,
materials and land, would have to drop significantly. "
Suitably, interest
rates also are projected to remain at historically low levels in the foreseeable
future. David Lereah, chief economist for the National Association of Realtors,
recently indicated that the 30-year fixed mortgage interest rate should
average 6.3 percent through the end of the year, and gradually rise to 7
percent by the end of next year. Even with a slight rise, certainly no one
can complain about those kind of rates.
According to Fannie Mae's annual
housing survey, more Americans are buying or plan to buy homes in part because
70% view the purchase of a home as the safest, most lucrative place to put
their money. This opinion cuts across age groups and income levels in all
regions of the country. "Many have seen appreciable gains in the value of
their homes", Fannie Mae CEO Franklin Raines says, "even those who bought
as recently as a year ago".
We frequently hear from our customers how amazed
they are at the rapid increase in their homes' value. Because we are so
competitive in our home pricing, more often than not we see appraisals at
the closing of our new homes that
are significantly more that the sales price. We definitely agree that it
does not take long to realize gains in the purchase of an Elite Home, and
that it is one of the safest bets for your investment dollar.
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