Here's my advice for homebuyers who are on the fence about purchasing.
Are you or is someone you know frustrated by the current real estate market? I’m seeing three distinct scenarios out there:
Some sellers love the market and are selling very quickly.
Some sellers are sitting on the fence and waiting on the sidelines to see what happens.
Some buyers are waiting for cooler and calmer market conditions.
Interest rates are still unbelievably low. The average right now for a 30-year, fixed-rate mortgage is 2.86%. The three major housing industry entities, Fannie Mae, Freddie Mac, and the Mortgage Bankers Association, all predict that prices will continue to rise in 2022 by as much as 6%. Last year, prices in our area rose by about 14%, so 6% is a conservative estimate in my opinion.
Rates are also predicted to rise to about 3.7% in 2022. I have a client who has been in their home for about four years. They bought it for $478,364 in 2017 and sold it in 2021 for $600,000. That’s $121,636 of appreciation in just four years! The home's value increased by a whopping 25.42%.
"Last year, prices in our area rose by an average of 14%."
If you purchase a home today, you can take advantage of being a homeowner, enjoying increased equity over the next year and the low monthly payment you’ll lock in because of the rates. If you wait until rates go up by just about 1%, you will be paying about $350 more per month on a $500,000 mortgage with a 10% down payment. That same house would cost about $535,000 if prices rise by the experts’ 6% estimate.
My advice? Buy this year if you can. If you have any questions or want to know how to start the process, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.