If you’ve been hesitant to buy a home, it might be time to reconsider. Housing experts who track key economic indicators affecting home sales conclude that this is a good time to purchase, whether you’re a first-time buyer or someone looking to move up to a more expensive home.
Here are three key factors to consider:
- Home prices are increasing.
The Home Price Expectation Survey is developed from a panel that includes over 100 economists, real estate experts and investment/market strategists, all of whom were asked about where prices are headed in the future. All 100 + projections are then averaged into a single number. The result for 2014? Home values will appreciate by 4.4 percent. What does that mean for a potential buyer? Simple: the longer you wait, the higher the price for the home, making it harder to qualify and to meet mortgage payments.
- Mortgage interest rates are projected to rise.
Freddie Mac recently published its 2014 Mid-Year Assessment for the U.S. Economic and Housing Market Outlook. For a 30-year fixed mortgage, interest rates currently hover around 4.2 percent. However, it’s projected that by mid-2015, the rate will be closer to 5 percent. Waiting to buy means higher mortgage interest payments each month.
- Declining vacancy rates and for-sale inventory.
Vacancy rates for early 2014 have moved down significantly, with the lowest rates seen in coastal markets. Also, the inventory of homes for sale is tightening, as more homeowners qualify for loan modifications. The combination of lower vacancy rates and tight for-sale inventory, says Freddie Mac, means that home price indexes will probably continue above-inflation growth for the rest of 2014.
What’s the bottom line on all these statistics? It’s likely that the longer you wait, the more you’ll pay for a home in both home price and mortgage rate. Plus it’s getting harder to find the house of your dreams as inventory tightens. Ask your realtor to calculate the cost of waiting to buy and then consider making a home purchase sooner, not later.