Is Now a Good Time to Buy?
With the housing market appearing to rebound over the past year, many buyers are wondering if now the is the time to purchase that new home they’ve had their eye on, or if it is time to shop around for what might be available in the area. The good news for buyers is that the mortgages rates have been declining and aren’t expected to get much higher in the coming months. The bad news, however, is that pricing values have begun to steadily rise up the charts and are expected to continue to increase in the foreseeable future.
With that said, you must decide whether you would like to risk waiting in hopes of getting a lower mortgage rate and hope the prices go down, or you can take action knowing what you now know.
Depending on where you buy, now is definitely the right time to purchase a new home. According to the New York Times, “Economists in recent interviews agreed that the rate for a 30-year fixed mortgage was unlikely to rise much above 4 percent this year. House prices, however, are rising nearly everywhere, and nowhere as rapidly as in the Sunbelt states.”
Good Time To Buy and Sell Houses
After seeing mortgage rates dip to a low in April, it would be hard to think that it will continue to get even better before rebounding, and with housing prices starting to climb, then you have to think that now is the time to buy. You may also wonder if now is the time to sell your property if you were thinking about it, but you may want to hold off until prices increase even more.
The median price of homes is increasing much faster than the mortgage rates have been dropping, and even if mortgage rates do start to rise, they won’t rise nearly at the rate seen over the last year.
The growth rates aren’t as high in the east and Midwest as they are on the west coast, but nationally, the prices are climbing. San Francisco has seen home values increase 14% in the last year, and Phoenix has seen a meteoric rise of 23%. Both of these numbers should cause a sense of urgency for buyers that now is the time to pull the trigger instead of waiting for prices and mortgage rates to go back into territories that will be hard to afford.
Better Position to Put Down the Down Payment
“When rates are rising, it’s because the economy is improving,” Jed Kolko, the chief economist of Trulia.com said, “so buyers are in a better position to put down the down payment and qualify for a mortgage.”
According to the New York Times, “Despite an upward trend over the last few months, the 30-year rate is unlikely to rise beyond 3.75 percent “for the foreseeable future,” said Keith T. Gumbinger, the vice president of HSH.com, a financial publisher, Stan Humphries, the chief economist of Zillow.com, agreed.” However, it is better to take advantage of the low rates now instead of taking the chance. The national average for a 30-year fixed-rate mortgage was 3.52 percent, according to Freddie Mac’s weekly survey released on Thursday, up from 3.51 percent the previous week. Expect these numbers to continue in that direction.
Remember, a positive impact takes months to reflect on the market, while a negative impact can be felt right away. Don’t wait for another negative surge in the market, strike while the iron is hot or you might regret your decision a few years down the road if anything negative were to happen.
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Angie Picardo is a writer for NerdWallet, a personal finance website that offers advice on how to navigate financial decisions from purchasing a new house to finding the best options for Miami airport parking.