It’s a great time to buy a home. We’ve all been hearing this for so long that it may have lost it’s urgency a bit.
However, now more than ever, it’s become quite clear that now really is a great time to buy a home. There’s little doubt that when we look back on this time in history, we’ll be saying, “that really was a great time to buy a home.”
Are you prepared to answer the call of this great opportunity?
According to he National Association of REALTORS®, the housing industry is experiencing strong buyer demand against low, but slightly improving, inventory levels, continued price increases, and fewer days on market. But, there are growing concerns in the industry and among consumers about rapid price gains and rising interest rates.
Here’s an interesting take on what’s happening right now from Lawrence Yun, Chief Economist and Senior Vice President of Research at NAR:
We’re keeping a close eye on mortgage rates. After years of historic lows, rates are on the way up and will likely close in on 5 percent by mid-2014 and go even higher in 2015, from an average 3.5 percent in early 2013. That is unwelcome news for buyers, and we can expect some households to be pushed out of the market as a result.
For example, there are about 17.8 million renter households with sufficient annual income—at least $36,000—to buy a $177,000 home at a 3.5 percent mortgage rate, compared to 14.9 million at a 5 percent mortgage rate.
One major factor can blunt the harm of rising rates: the return to normal underwriting standards. In fact, lenders, sitting on portfolios of healthy loans, started making financing more available in recent months, and the trend is continuing. I estimate 15 to 20 percent more households qualifying for safe, affordable mortgages as lenders offer conventional conforming loans to households with credit scores in the 720 range, down from 760–770 in the last several years, and making FHA loans available to borrowers with scores in the 660 range, down from 680–700.
What can also spur more buying is improving employment. Job growth reached 2 million over the last 12 months and the same rate is expected in the year ahead.
So if you’re thinking about buying a home – do it and do it soon!
While no on can predict what’s going to happen in the next couple of months let alone the next few years, the odds are quite favorable that both home prices and interest rates will most likely continue to rise.
Pent-up demand, less supply and an improving economy have all contributed to higher home prices. It’s fairly safe to say that prices have bottomed. Similarly, it’s probably an even safer bet that interest rates will not fall below historic lows again anytime soon. If the recovery stays on track, it’s most likely that both prices and rates will rise further.
So, what are you waiting for? If now’s the time for you to buy a new home, here’s how to get started:
Get preapproved for a mortgage – it’s the best way to learn what you can afford and show a seller you’re serious.
Find a real estate agent and think before you shop – a professional Realtor® can save you both time and money when it comes to finding the home of your dreams, negotiating with the seller and closing the deal. From helping you narrow down your wish list to writing a winning offer and dealing with all the important and necessary paperwork, your Realtor® will help ensure a smooth transaction.