Home ownership always has a good list of benefits. The obvious benefits of creating a stable place to raise your family, and having a resource to build your equity chief among them. Right now however, there are many reasons to that you should consider this process now. Interest rates are still hovering near historic lows. […]
Home ownership always has a good list of benefits. The obvious benefits of creating a stable place to raise your family, and having a resource to build your equity chief among them. Right now however, there are many reasons to that you should consider this process now.
Interest rates are still hovering near historic lows. Why wouldn’t you want to take advantage of the lowest rates you will likely ever see in your lifetime? In checking with several national economists, interest rates are expected to rise around December 2016 to around 4%. Gasp! Still a great rate; but as you know, great deals just do not last forever.
Besides favorable financing a good reason to jump into the housing market is that inventory levels have risen and have hit nearly 1,860,000 units nationally so there is more to choose from than there was just a year ago. Many REALTORS report good inventory is still fairly tough to come by. The good news is since builder confidence is up there are roughly 68,000 more new homes on the market compared to the last year. Builders are still not building enough to replenish all the homes that were not built during the recession due to their lack of credit as well as a reduction in the construction labor force.
One of the big reasons it is a good time to buy a home is that homeowners are stronger again. Many good statistics point to improvement in household financials. There has been good job growth at 252,472 more jobs in the past year. In addition to more work out there, people’s debt to income ratio during the recession has dropped from 130% down to 103% meaning less people are under water and can actually afford to buy.
Median income has also risen from $51,000 to $51,900 in the past year and recent property tax cuts and reductions as well as lower gas prices have essentially given everyone raises to spend a little more money. One previous barrier to housing improvement was the move up buyer being able to sell their home. Nationally homeowner’s equity has increased by nearly $11 million. This in turn has raised consumer confidence to levels of pre-recession time.
One area that has held housing back was financing availability. Mortgage credit access has improved and the average credit score is up nearly 35 points from pre recession times which allows more people access to more financing options.
So financially there are many motivators to buy a new home but consider this. There are still 895,172 unfilled households from pent up demand, and families co-habituating. When many of those buyers jump into the market expect to see pricing rise faster than the very minimal 1-2% jumps in pricing we have been seeing the last few years. Simple supply vs. demand.
Bottom line, now is a really good time to buy a new home, although prices are climbing it is a sign of a healthy market. The historically low interest rates will only last for a short while, until the Fed wants decides to put a cap on inflation. So if you are thinking of making a move, get out there now, it is always better to buy too soon than too late.