Are you planning on buying a home? Are you ready? It would definitely depend on your current situation and your finances. It is a very big decision so here are some reasons why now is a good time to buy.

 

1. Rising interest rates

Interest rates have been rising since late last year when the Federal Reserve increased its benchmark interest rate by a quarter point in December and in March. There are about three more upward adjustments within 2017 according to experts.

It is expected that the trend of increasing interest rates is expected to continue. Securing a fixed rate loan for current homeowners with an adjustable rate mortgage is advisable before rates increase further.

 

2. Buying may be cheaper than renting

Buying now may be able to save you more money in the long term than renting if you’re living in one of the larger metropolitan areas. It is generally cheaper to own than rent in these areas.

You have to put into consideration al the expenses like mortgage interest expense, repairs, closing costs, taxes, among others. To have an accurate cost comparison, divide the cost of expenses over total number of months you plan on staying in a home.

 

3. Increase in home prices

Home prices have increased over the years since 2007 when the housing crash occurred. It has outpaced renting costs in the past months. Now is the time to buy if this trend continues as it may be more expensive to buy than rent later on.

Home prices are projected to rise over the course of 2017 according to Fannie Mae, Freddie Mac, the National Association of REALTORS®, Kiplinger, and the Mortgage Bankers Association.

The increase averages to 4.9 percent based on the experts’ predictions.

 

4. Shrinking inventory

There are a lot of people right now who were hesitant to jump in during the housing bust and are now in the market for homes and this means the inventory is getting low. It is expected to decline further in 2017 especially for median- and low-priced homes.

Parts of the market with the smallest inventory are moderately priced homes which are homes that millennials are interested in. These buyers, who were born after 1980, are the majority of the buyers now ready to jump into the market.

 

5. Supply and Demand

Since median-priced homes are scarce, buyers compete over them and this makes the prices go up. This is basic supply and demand. Being in a seller’s market makes it difficult for buyers to negotiate a good price as well.

With the increase in prices and rates, some buyers may stop their search for a home and this would give an advantage to those who remain in the market since they would have more leverage to negotiate with sellers.

If you are thinking of buying please get with Pete Veres, CRS – Certified Residential Specialist and set up your free buyers consultation and he can also help provided you with a free loan free approval. Pete is at 505-362-2005, email: [email protected]

 

Also check out his free home search app Pete Veres- REMAX on apple or android.