Some Common Questions being Asked in Today's Market
What will happen with home prices?
If you’re currently toying with the idea of purchasing a home, you’ve probably wondered at some point if home prices and/or home equity will decrease. While we can’t fully forecast the future, we can do our best to provide you with a well-rounded opinion based on data and what the experts are saying.
It IS still a seller’s market. Why? Because prices are driven by supply and demand and there is still a relatively low supply of homes on the market. This is good news for you if you are considering selling your home because you are more likely to receive your asking price. This in return will provide you with equity to put toward your brand-new home!
What’s going to happen with mortgage rates?
This year’s housing market has been defined by rapidly rising mortgage rates. They have more than doubled in less than a year which is something we haven’t seen before.
To better understand what this means, the average monthly mortgage payment is about $1,000 more than it was a year ago. Why is that? The answer is inflation. To best predict what’s going to happen with rates is to keep a close eye on inflation.
“If inflation continues to decelerate over the next several months, mortgage rates will likely stabilize below 7%. Thus, rates will be in the 6%-7% range in December. That’s still double the previous year’s rate, but it’s better than an 8% rate, which is the historical average for the 30-year fixed mortgage. The monthly mortgage payment decreases by $250 when the rate drops by one percentage point.” - Nadia Evangelou, senior economist & director of forecasting at the National Association of Realtors
Is Now a good time to buy a home?
It’s important not to ask the question, “is now a good time to buy?” But rather, “is now a good time to buy for ME?” If you’re a first-time homebuyer, the biggest factor to consider is rising rent costs. Homeownership presents the opportunity for a stable monthly payment as well as the ability to build wealth and make a financial investment. If offers security and a sense of accomplishment that renting cannot.
The next biggest piece that will help you determine whether now is a good time or not to buy for YOU is that life happens! Personal situations change, jobs change, and family dynamics change. Remember why you are looking for a new home in the first place. Discover your WHY. Do you need a remote workspace? Is it time to upgrade your small kitchen? Do you simply need more space? If you can relate to these questions, it may be time to look into your options!
“If you can find a house that meets your financial expectations for a monthly payment and it is a good time for you to buy, then do that…And if you wait for prices to fall and they never do, you may discover the hard way that the house you found a year ago that you really loved, that you could afford but you passed on, is more expensive next year,” Odessa Kushi, deputy chief economist of First American
Sources: Keeping Current Matters