Buy a Home Now
Here are some reasons to buy a home now.
INTEREST RATES ARE PROJECTED TO GO UP TO 5%
We just hit the fifth week of falling mortgage rates. The average interest rate on a 30-year fixed-rate mortgage hit 4.23 percent this past week which is the lowest it has gotten since November! The rates for a 30-year loan fell as stock market volatility and weaker-than-expected economic reports drove investors to the safety of the government bonds that guide borrowing costs. The average rate for a 30-year fixed mortgage was 4.23 percent this past week down from 4.32. The average 15-year rate dropped from 3.4 percent to 3.33 percent.
Market volatility and weaker-than-expected economic reports that effect mortgage rates will be temporary as the Federal Reserve continues to unwind stimulus measure according to Greg McBride, chief financial analyst at Bankrate.com. “The improving economy and the Fed dialing back stimulus mean that rates will move higher as the year unfolds.” The Mortgage Bankers Association, the National Association of Realtors, Freddie Mac and Fannie Mae have all projected that the 30-year mortgage interest rate will be over 5 percent by this time next year. That is an increase of almost one full point over current rates. A one percent increase in mortgage rates decreases your buying power by 10 percent. It really is the time to buy.
PRICE INCREASES ARE EXPECTED
Buyers will probably pay more in price and interest rates if they wait until the spring to purchase their home. Whether you are a first-home buyer or a move-up-buyer, you will end up paying more in both price and interest rate. As a move-up-buyer, it will cost you more in net dollars as the home you will buy will appreciate at approximately the same rate as the house you are living in now. Today, real estate is selling “low” compared to where it will be this spring and also next year. Home prices rose 11 percent in December from a year earlier and is the 22nd straight increase. It really is the time to buy.
With inventory low in many regions, finding the home of your dreams may become more difficult and the best homes in the best locations sell quicker. There is no longer a large assortment of houses to choose from. There are more buyers in the spring market which causes competition among the limited supply of homes. When many people are looking to buy a home and the supply is limited, than the price of the home increases. Also, as the spring approaches, the price of homes for sale typically increases. It really is the time to buy now.