3 Reasons You Should a Home Buy Before the End of 2017
With so few homes for sale, it is tough buying a home in today’s market. But waiting to buy because you think that the market will be better in the future is a gamble. Real estate experts say that if you’ve been thinking about buying in the near future or are anticipating a life change that may force you to move, you should be buying as soon as possible. Here's why:
1. Interest Rates Are Rising
Interest Rates were at an all-time low last August, bottoming out at 3.55%. Since then, the Federal Reserve has decided to raise interest rates and mortgage rates of slowly been climbing. Today rates are averaging around 4% but could easily climb to 6% in the coming years.
Rates increasing aren’t necessarily a deal breaker for buyers. The National Association of Realtors calculates that a raise in interest rates from 4.2% to 5% would increase an average monthly mortgage payment by $90. And an interest rate of 5% is still historically low, especially when compared to 1981 when rates hit 18%.
Another upside is that when rates go up, competition & prices often go down because higher mortgage rates eventually cause sellers to be more flexible on pricing.
2. Inventory is Shrinking
In Tampa in September of 2017 there were 2,550 homes for sale. That is over a 20% decrease from last year. Real estate experts predict that this trend will continue for the foreseeable future, meaning buyers have more homes to choose from today than they will next year, or even next month.
While the winter time is widely considered to be the off-season for real estate, if you start your search now you’ll have less competition than you will if you wait.
Bottom line: You’ll face more competition for fewer homes every day you wait to start looking.
3. Home Prices Are Still Rising
The bad news for buyers is that home prices in many areas are now higher than they were before the crash and are continuing to rise. How high prices will rise and low long they remain high is anyone’s guess.
The good news? The quicker you get into the market the better chance you have of getting a lower price.