Have you been considering buying a house? 2017 couldn’t be a better time. Buying a home in 2017 will feel something like jumping onto the subway just as the doors are closing. Your heart’s pounding and you’re winded from the race, but you made it – just in the nick of time.
OK, so that may or may not be a little exaggerated, but here’s the thing—interest rates have begun to rise and will likely continue to do so. Inventory is low and could shrink more. And home prices? Well, home prices are on the rise, as well – and they’re not likely to fall any time soon.
If you don’t jump aboard the real estate train in 2017, you might be left at the station gambling that the market will be better for you to purchase down the road. If you’ve been playing around with the idea of buying a home, or you have a new baby on the way or a job transfer down the pipeline and buying a new home is the next step, you should start looking for a house now. Below is some info from a Realtor.com article telling us why:
1. Rates are rising
When rates hit 18% and seemed to continue to rise every day in 1981, single-digit rates seemed like an unattainable dream. That summer they saw a change in the market and mortgage rates on 30-year mortgages bottomed out at 3.55%. Now that the Federal Reserve finally decided to raise its key interest rate, mortgage rates have been climbing slowly. Today, the average rate is just above 4%; but 2019 or 2020, rates could easily climb to 6%.
Before you freak out, take heart: Rising rates aren’t necessarily a deal breaker for buyers. The National Association of Realtors® calculated that a rise from 4.2% to 5% would increase average monthly mortgage payments by $90—not nothing, but not a catastrophe, either. And if you take the long view, those higher rates are still historically low.
Another upside: When rates go up, competition and prices often go down.
2. Inventory is shrinking
In November 2016, there were only 1.85 million homes for sale. That’s a nearly 10% drop from the year before. And it continues a trend of steady decline since just before the housing crash, when inventory peaked.
Real estate experts predict that inventory will continue to shrink, at least for the foreseeable future. That means that in most areas of the country, buyers have more homes to choose from today than they will next year.
Or even next month. If you get moving now (during the winter, which is largely considered to be real estate’s off-season), you’ll have less competition for those homes than you will in the peak spring and summer months.
Bottom line: Every day you wait to start looking for a new home, you face stiffer competition for fewer homes.
3. Home prices are still rising
The bad news for buyers is that home prices now stand higher than before the 2007 crash, increasing 5% from 2015 to 2016. And housing experts expect an additional 2% to 3% jump in 2017.
How high prices will rise and how long they’ll remain high is anyone’s guess. Rising mortgage rates and the new Trump administration have introduced “uncertainty” into the real estate market.
The good news? If you jump into the market pronto, you just might make it before those doors close.
For information on the local 30A Real Estate market or to start your search today, call 850.231.9007.