In light of recent housing trends and forecasts, a strong case could be made for buying a home now instead of waiting until 2018.
We are about through with 2017, and that’s usually when a lot of would-be home buyers start asking the same question. Should I buy a house now, or wait until 2018?
To answer this question, you’ll need to do equal parts soul-searching and market research. And here’s what you need to know on the market side.
Should You Buy a House Now or in 2018?
Some of the important considerations when deciding whether to buy a house now or in 2018 are: home price trends, mortgage borrowing costs, and the cost of renting versus buying. So let’s take a look at each one of these factors in turn.
Home prices are slowing down, but could continue rising in most US cities.
According to a recent report earlier in the year from the National Association of Realtors, the median home price in the U.S. rose by 5.8% in May 2017, compared to a year earlier.
But we are starting to see a cooling trend, where home values are concerned. After a couple of years of above-average appreciation, house prices now appear to be rising more slowly.
With that being said, they are expected to continue rising — to some degree — over the next year or so. This is an important trend to watch, as it will help you decide whether to buy a house now or in 2018.
This is the kind of research that needs to be done at the local level. National trends are great for generating headlines. But as a home buyer, you need to know what’s going on in your local real estate market.
Some cities could actually “flat-line” over the next year, in terms of home price changes. Other marketscould see robust growth, particularly those in the Pacific Northwest where demand currently exceeds supply. This underscores the importance of doing local market research when deciding whether to buy now or later.
Mortgage rates have leveled off, but are predicted to rise gradually going forward.
At the beginning of this year, the average rate for a 30-year fixed mortgage was 4.20%. That’s based on the weekly market survey conducted by Freddie Mac. Rates have actually come down since then, defying earlier predictions.
When measured earlier today (June 22, 2017), the average rate for a 30-year mortgage was holding steady at around 3.90%. So now might be a good time to buy a house.
But what about 2018? What might happen if you postpone your home-buying plans until next year? While no one can predict future mortgage rate trends with complete accuracy, most economists and housing analystsexpect rates to inch upwarddue to a strengthening economy and policy changes by the Federal Reserve.
The Mortgage Bankers Association, for example, recently predicted that the average 30-year mortgage rate would rise to around 4.4% by the fourth quarter of 2017.
If home pricesandmortgage rates rise, home buyers in 2018 will have less buying power than those who purchase homes now. So, based on current data and expert forecasts, a strong case could be made for buying a home now instead of waiting until 2018.
The monthly cost of renting and buying are similar in many cities.
It’s also important to look at the monthly costs associated with renting versus buying a home.We covered this topiclast month, pointing out that renters in many U.S. cities could buy a home without a significant increase in monthly housing costs. In some cities, a person’s monthly housing costs would actually go down when buying a house.
Here’s a relevant quote from that previous report: “It’s still a better deal to buy a home than to rent, in most cities across the U.S. But changing economic conditions are making it a close call in some areas.”
But again, this is alllocation specific. Anyone considering the prospect of buying a house now, versus waiting until 2018, should research the cost of renting versus buying in their local area.
Home buyers can also gain more control over their monthly housing costs. With rent-controlled properties aside, rents are currently rising in much of the country. In contrast, home buyers who use fixed-rate mortgage loans have a lot more control over their monthly housing costs.
By opting for a fixed interest rate, a homeowner can enjoy a lot more stability in terms of monthly payments. Food for thought!
Brought to you by Home Buying Institute
Author:Kristan Linehan Phone: 661-313-0751 Dated: October 6th 2017 Views: 123 About Kristan: ...
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