After witnessing the housing bubble ‘pop’ just a few years ago, many would be buyers may be hesitant to pull the trigger. Today, we want to explain that the greatest risk a buyer can take right now is actually waiting to buy a home.
We realize that every purchaser wants to be able to get the best deal. They want a great price and the lowest mortgage interest rate possible because those two items together will determine the monthly cost their family will pay. Let’s look at each one:
Are home prices rising?
Just last week, the Case Shiller Pricing Index was released. The index revealed that U.S. home prices increased by 10.2% over the last twelve months. Last month, the Home Price Expectation Survey was released predicting that home values would increase by at least an additional 3.5% for each of the next five years.
If you were waiting for the absolute bottom of the home price declines, you already missed it.
Are interest rates rising?
According to Freddie Mac’s Weekly Primary Mortgage Market Survey, the 30 year mortgage rate shot up to 3.81% last week – the highest level in over a year. This is an increase of a half of a percentage point in the last six months. And the Mortgage Bankers Association, Fannie Mae and the National Association of Realtors all predict that rates will continue rise over the next eighteen months.
If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.