Just two weeks ago, we posted an article discussing where mortgage interest rates may be heading over the next twelve months. We quoted projections from Fannie Mae , Freddie Mac , the Mortgage Bankers’ Association and the National Association of Realtors . Each predicted that rates would begin to rise slowly and steadily throughout 2016.
However, shaky economic news and a volatile stock market have actually caused rates to drop six out of the last seven weeks, and have remained at 3.65% for the past two weeks.
Rates have again fallen to historic lows yet many experts still expect them to increase in 2016. The only thing we know for sure is that, according to Freddie Mac, current rates are the best they have been since last April.
If you are thinking of buying your first home or moving up to your ultimate dream home, now is a great time to get a sensational rate on your mortgage.
With spring right around the corner, you may be wondering if you should wait to enter the housing market. Here are four great reasons to consider buying a home today instead of waiting.
CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.3% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.4% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.2% a year for the next 5 years.
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained below 4%. Most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Freddie Mac & the National Association of Realtors are in unison projecting that rates will be up almost three-quarters of a percentage point by this time next year.
An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.
As a paper from the Joint Center for Housing Studies at Harvard University explains:
“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.
But what if they weren’t? Would you wait?
Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.
If you are ready and willing to buy, find out if you are able to. Meet with a local real estate professional who can help you find your dream home.
Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey .
Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.
Home values will appreciate by 3.7% over the course of 2016, 3.3% in 2017 and 3.2% in the next two years, and finally 3.1% in 2020 (as shown below). That means the average annual appreciation will be 3.3% over the next 5 years.
Individual opinions make headlines. We believe the survey is a fairer depiction of future values.
It is common knowledge that a large number of homes sell during the spring-buying season. For that reason, many homeowners hold off on putting their home on the market until then. The question is whether or not that will be a good strategy this year.
The other listings that do come out in the spring will represent increased competition to any seller. Do a greater number of homes actually come to the market in the spring, as compared to the rest of the year? TheNational Association of Realtors(NAR) recently revealed which months most people listed their home in for 2015. Here is a graphic showing the results:
The three months in the second quarter of the year (represented in red) are consistently the most popular months for sellers to list their homes on the market. Last year, the number of homes available for sale in January was 1,860,000.
With the national job situation improving, and mortgage interest rates projected to rise later in the year, buyers are not waiting until the spring. They are out looking for a home right now. If you are looking to sell this year, waiting until the spring to list your home means you will have the greatest competition for a buyer.
It may make sense to beat the rush of housing inventory that will enter the market in the spring and list your home today.
Checkers is a simple game with a simple objective; eliminate the other player’s pieces. Even the process of doing so is simple, jump the other player’s pieces and start a collection. There is very little thought as to a defensive strategy and it is often more reactive than strategic.
Even though the objective of Chess is simply laid out — obtain the other player’s King — the process in which to obtain this goal is much more strategic. Chess requires a greater understanding of the ability of each of the 9 different pieces on the board and a risk assessment that takes longer than a simple scan of the board.
“It’s a game in which the winning strategy is dynamic and requires complex thought across many turns, both for the player and their opponent’s turns. Chess requires a player to understand the context behind the moves on the board rather than just the risks offered by each individual turn.” – Play Chess Not Checkers by Zach West
You may have heard the saying, “Play Chess, Not Checkers” before, but how does this apply to real estate?
So you want to sell your house. You can just put a sign in your front yard and call it a day, right? Wrong! The process of listing your home for sale and what happens next is much more complex than that.
According to theOrlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, and who knows what these actions are to make sure that you acquire your dream?
One example, as we’ve reported before , is the fact that 92% of buyers search online for a home. That is in comparison to only 28% looking at print newspaper ads. Most real estate agents have an extensive internet strategy to promote the sale of your home. Do you?
An experienced real estate professional knows the obstacles associated with buying or selling a home and works closely with other professionals to ensure the process is a smooth one.
Just like with any skill, practice and experience bring a sense of confidence and expertise. Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.
With an experienced Real Estate Professional on your side, even the complex process of buying your next home or selling your house can be strategically navigated.
You’ve decided to sell your house. You begin to interview potential real estate agents to help you through the process. You need someone you trust enough to:
Be careful if the agent you are interviewing begins the interview by:
An agent’s success and the success of their company can be important considerations when deciding on the right real estate professional to represent you in the sale of the house.
However, you first need to know that they care about what you need and what you expect from the sale. If the agent is not interested in first establishing your needs, how successful they may seem is much less important
Look for someone with the ‘ heart of a teacher ,’ who comes in prepared well enough to explain the current real estate market and patient enough to take the time to show how it may impact the sale of your home.
Not someone only interested in trying to sell you on how great they are.
According to the National Association of Realtors’ (NAR) Existing Home Sales Report , homes were on market for an average of 58 days in December. This was slightly longer than the 54 days in November, but still better than the 66 days experienced in December 2014.
Colorado, Utah and Delaware led all states as home are selling in 30 days or less on average. The map below was created using results from NAR’s Monthly Realtor Confidence Survey .
Buyer demand remains strong. The inventory of homes available for sale remains low. If you are thinking about listing your home for sale this year, meet with a local real estate professional who can help you take advantage of current market conditions!
A survey by The Joint Center of Housing Studies at Harvard University reveals that when a family is buying a home they consider the financial benefits of homeownership along with the social benefits. The survey mentions things like:
So how did homeownership match up against other investments in 2015? Here is a chart that compares its return on investment against precious metals and the stock market last year:
Not only did homeownership offer all its social benefits. It also was a great investment financially.
Is spring closer than we think? Depending on which Groundhog you witnessed today, you may have less time than you think to get your home on the market before the busy spring season.
Many sellers feel that the spring is the best time to place their home on the market as buyer demand traditionally increases at that time of year. However, the next six weeks before spring hits also have their own advantages.
Here are five reasons to sell now.
Foot traffic refers to the number of people out actually physically looking at homes right now. The latest foot traffic numbers show that buyers are still out in force looking for their dream home. These buyers are ready, willing and able to buy…and are in the market right now!
Take advantage of the strong buyer activity currently in the market.
Housing supply just dropped to 3.9 months, which is well under the 6 months’ supply that is needed for a normal housing market. This means, in many areas, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However,additional inventoryis about to come to market.
There is a pent-up desire for many homeowners to move, as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last three years. Many of these homes will be coming to the market in the near future.
Also, new construction of single-family homes is again beginning to increase. A study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference).
The choices buyers have will increase in the spring. Don’t wait until all this other inventory of homes comes to market before you sell.
One of the biggest challenges of the housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. There is less overall business done in the winter. Therefore, the process will be less onerous than it will be in the spring. Getting your house sold and closed before the spring delays begin will lend itself to a smoother transaction.
If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by 5.4% over the next 12 months according to CoreLogic . If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30-year housing expense with an interest rate below 4% right now. Rates are projected to rise by three-quarters of a percent by the end of 2016.
Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?
Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.
