We’re only two months into the new year and already we’re seeing an abundance of reports on the housing market in 2016. Whether or not it’s an optimal time to buy a home is the question most consumers on the market have. The general consensus? More homes are expected to hit the market, rental rates will continue to skyrocket, and mortgage rates are expected to gradually increase.
The rental market has been hot for some time now, and that’s expected to continue. As millennials continue to pay off their student loans and are more keen to living in urban areas, rental prices will continue to rise and the vacancy rate will continue to decline. There’s an overwhelming demand for apartments, specifically in central hubs on both the east and west coast, thus these alarming rates. With rates as high, if not higher than a mortgage, in most cases buying a house is the better deal!
Another factor that might entice you to buy is the more available homes expected to hit the market this year. In and article for money.cnn.com back in December of 2015, chief economist at Realtor.com, Jonathan Smoke said, “Because of the price appreciation they have experienced, you will have more sellers put homes on the market next year.” Furthermore, developers are expected to focus on building more starter and middle-level homes, which will boost the inventory and further eliminate bidding wars.
Although we’ll likely see the Federal Reserve further increase interest rates this year, they’re still considerably low. Thirty-year-fixed rate mortgages averaged below 4% in 2015. According to FreddieMac.com rates should only top out at 4.4% this year, which is still dramatically less than what it was a decade ago. It would be beneficial to get approved for a mortgage this year while rates are still at an all-time low.
The overall verdict, from a multitude of authoritative figures in the real estate market, is to buy a home in 2016. There are more options readily available for you to choose from, it’s likely the lowest interest you’ll ever see in a mortgage, and renting is no longer a feasible option!
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