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CONTACT:
Matt Derrick
HBA
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New-Home Buyers Taking Advantage of Today’s Market

It’s hard to read a newspaper or watch television without news about the national housing market. There is never a shortage of advice when it comes to timing a new-home purchase, and now is certainly no exception. With so much activity in the housing market, some consumers may have a tendency to take a wait-and-see approach. Unfortunately, that’s an attitude that could be a mistake in Kansas City.

With both home prices and mortgage rates rising upward, waiting to buy a new home could be costly in the local market. While national new-home prices have held steady or even dropped in some locations nationwide, the exact opposite is true in the metropolitan area. According to data from the Kansas City Regional Association of Realtors, local new-home prices are up 6 percent this year, continuing trends for higher new-home values in the region. The good news for consumers is that buying a new home here means there is a good opportunity to see that investment gain in value.

A key component of affording a new-home for most consumers is the mortgage rate for their home loan. The average rate for a 30-year fixed-rate mortgage has hovered around 6.5 percent in recent weeks. While prospects are favorable for rates to remain around this level in the short-term, most projects call for rates to increase in 2008 and 2009. A rise of just one point in mortgage rates will add about $130 a month to the cost of a $200,000 mortgage – a total of $46,000 over the lifetime of the loan.

While local home builders have reduced construction in recent months to help lower inventories, buyers have more selection right now than ever before in Kansas City. New housing choices such as lofts and condominiums from downtown to the suburbs and innovative single-family communities and home designs mean plenty of options for buyers with different budgets and lifestyles.

Of course financial benefits of buying a new home are significant considerations as well. The biggest benefits come at tax time, when you’ll likely be able to deduct your mortgage interest and property taxes and decrease your tax burden. Today’s new homes are also more than twice as energy efficient as homes built just 25 years ago, which translates into lower heating and cooling bills during Kansas City’s blazing summers and frigid winters.

Homeownership is the single largest source of wealth for most American families. Owning a home is a foundation toward a stable financial future and is one of the best investments most families will ever make. Taking advantage of today’s housing market is a move that can pay dividends both today and for many years to come.

For 60 years, countless Kansas City families have taken their first step toward homeownership during the annual Parade of Homes. This year’s parade spotlights 638 new homes across the metro area with homes open daily from 11 a.m. to 6 p.m. Sept. 16-30. The parade is produced by the Home Builders Association of Greater Kansas City. Admission is free. For more information, visit www.kcparadeofhomes.com.

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