Is Now the Right Time to Buy a New Home?

New buyers, move up buyers and sellers – you’re all affected……..

first-time-home-buyers (1)In today’s market, new buyers are trading astronomically high rent payments for the stability of a mortgage, lower monthly payments, and much better living conditions than rental houses and apartments are providing.  (Hint:  this is important information for sellers also)

The double whammy.

Where are interest rates and home prices headed?  The answer to both of these questions has a HUGE impact on your wealth. That is why timing becomes important.  Don’t you want to get the best deal on buying a home before the prices rise and before the rates kill your budget?  I call it the double whammy for buyers……….

Double Whammy #1:  Interest Rates

Mortgage-Rate-Projections-KCM

According to Freddie Mac’s February 2015 U.S. Economic & Housing Marketing Outlook, rates are projected to steadily increase over the course of 2015.  So far the numbers are 100% accurate!

 

 

How Will This Impact Your Mortgage Payment?

buyers purchasing power As you can see from the chart, a $1852 budget buys less and less as the interest rate rises.  At a 3.75% rate, you could afford a $400,000 home; at 4.0% it decreases to a $360,000 home. Catching the low interest rate becomes an important financial factor.  New buyers to the market will be the most negatively impacted by rising rates.

Double Whammy #2:  Home Prices

The most recent Home Price Expectation Survey gives insight into where experts believe prices will be leading up to 2019 – UP, UP, UP!

Every quarter, Pulsenomics surveys a nationwide panel of over 100 economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

It’s NOT good news for those that wait – a 19.6% increase in home prices over 5 years –  there’s been a 6% increase already this year!

The bottom line:  Even a small rate increase combined with a home price increase can impact your family’s wealth.  Give me a call to sit down and evaluate your ability to purchase your dream home.  712-541-5118

To get a local market report contact me at marceta@propertyprosgroup.com.

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