Two Questions To Ask Yourself if You’re Considering Buying a Home

 

If you’re thinking of buying a home, chances are you’re paying attention to just about everything you hear about the housing market. And you’re getting your information from a variety of channels: the news, social media, your real estate agent, conversations with friends and loved ones, overhearing someone chatting at the local supermarket, the list goes on and on. Most likely, home prices and mortgage rates are coming up a lot. 

To help cut through the noise and give you the information you need most, take a look at what the data says. Here are the top two questions you need to ask yourself about home prices and mortgage rates as you make your decision: 

1. Where Do I Think Home Prices Are Heading?

One reliable place you can turn to for that information is the Home Price Expectation Survey from Pulsenomics – a survey of a national panel of over one hundred economists, real estate experts, and investment and market strategists. 

According to the latest release, the experts surveyed are projecting slight depreciation this year (see the red in the graph below). But here’s the context you need most. The worst home price declines are already behind us, and prices are actually appreciating again in many markets. Not to mention, the small 0.37% depreciation HPES is showing for 2023 is far from the crash some people originally said would happen.

Now, let’s look to the future. The green in the graph below shows prices have turned a corner and are expected to appreciate in 2024 and beyond. After this year, the HPES is forecasting home price appreciation returning to more normal levels for the next several years.

So, why does this matter to you? It means your home will likely grow in value and you should gain home equity in the years ahead, but only if you buy now. If you wait, based on these forecasts, the home will only cost you more later on.  

2. Where Do I Think Mortgage Rates Are Heading?

Over the past year, mortgage rates have risen in response to economic uncertainty, inflation, and more. We know based on the latest reports that inflation, while still high, has moderated from its peak. This is an encouraging sign for the market and for mortgage rates. Here’s why.

When inflation cools, mortgage rates generally fall in response. This may be why some experts are saying mortgage rateswill pull back slightly over the next few quarters and settle somewhere around roughly 5.5 and 6% on average.

But, not even the experts can say with absolute certainty where mortgage rates will be next year, or even next month. That’s because there are so many factors that can impact what happens. So, to give you a lens into the various possible outcomes, here’s what you should consider:

• If you buy now and mortgage rates don’t change: You made a good move since home prices are projected to grow with time, so at least you beat rising prices.
• If you buy now and mortgage rates fall (as projected): You probably still made a good decision because you got the house before home prices appreciated more. And, you can always refinance your home later on if rates are lower.
• If you buy now and mortgage rates rise: If this happens, you made a great decision because you bought before both the price of the home and the mortgage rate went up.

Bottom Line

If you’re thinking about buying a home, you need to know the facts on what’s happening with home prices and mortgage rates. While no one can say for certain where they’ll go, expert projections can give you powerful information to keep you informed. Let’s connect so you have a professional to add in an expert opinion on our local market.

March 14, 2017

The spring market is off to a very strong start this year in the communities North of Boston, MA.  The uncertainty of mortgage rates are causing many buyers to feel a high level of urgency. While it is a sellers market, depending on the type of home, location and price point, the level of demand can vary greatly.  Many homes are selling within days, while others a few weeks. Some homes are receiving a few offers selling for close to asking and others  are getting 15+, selling for tens of thousands over.

If you are in the market to move in the Suburbs North of Boston, call us to today to make sense of this crazy market.   For sellers, pricing, preparation, strategy, and understanding the nuances of navigating a bidding war is critical for taking advantage of this market to get top dollar.  For buyers, this market can be extremely frustrating!   it is crucial to understand the market climate you are in. It is just as important to understand strategies on getting an offer accepted in a bidding war as well as knowing when it is unnecessary to outbid yourself, and over pay by thousands, when you arent competing with other buyers.

 

 

 

Mortgage Interest Rates Went Up Again… Should I Wait to Buy?

Mortgage interest rates, as reported by Freddie Mac, have increased over the last several weeks. Freddie Mac, along with Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors, is calling for mortgage rates to continue to rise over the next four quarters.

This has caused some purchasers to lament the fact they may no longer be able to get a rate below 4%. However, we must realize that current rates are still at historic lows.

Here is a chart showing the average mortgage interest rate over the last several decades.

Bottom Line

Though you may have missed getting the lowest mortgage rate ever offered, you can still get a better interest rate than your older brother or sister did ten years ago, a lower rate than your parents did twenty years ago, and a better rate than your grandparents did forty years ago.

DAILY REAL ESTATE NEWS | THURSDAY, DECEMBER 15, 2016 

The Federal Reserve hiked short-term interest rates Wednesday, in a move largely predicted by economists. So, what does this mean for mortgage rates and buyers?

Read more: Fed Warns About a 'New Housing Crisis'

First off, the Fed does not set mortgage rates. Short-term rates are different from long-term rates. Mortgage rates typically follow long-term bond rates, such as the 10-year U.S. Treasury note. Longer-term rates typically adjust before the Fed makes a move.

Indeed, mortgage rates have risen near to 60 basis points since the presidential election. More than twice the quarter-point increase that the Fed voted on Wednesday.

The Fed announced that it expects to raise short-term rates three times next year by a total of 75 basis points.

“That means rates like we’ve seen for most of the past five years are indeed history,” writes Jonathan Smoke, realtor.com®’s chief economist, in his latest column. Mortgage rates in the 3 percent range are gone.  

“Mortgage rates will move higher before the Fed acts again, so if the Fed carries out its three planned hikes in 2017, we could come close to 5 percent on 30-year conforming rates before the end of next year,” Smoke notes.

On Wednesday, the average 30-year conforming rate was just under 4.2 percent.

Smoke believes that rates are more likely to move in the month ahead of each key Fed policy meeting. As such, the important meetings to note are in March, June, September, and December 2017.

How big of an impact could rising rates have in the coming months? A median-priced home would be $978 per month payment at Wednesday’s rate of 4.2 percent (and assuming a 20 percent down payment), realtor.com® notes. Take that rate to 5 percent, the monthly payment jumps up to $1,074, nearly $100 more.

“If you intend to buy next year and finance the purchase with a mortgage, acting sooner rather than later will cost you less,” Smoke says is the message to home buyers.

Source: “Fed’s Rate Hike Confirms It: Time Is Running Out on Low Mortgage Rates,” realtor.com® (Dec. 15, 2016)