The Year To Buy A House
Tyler Sheff | Reasons To Take Advantage Of The Market This Year
Heading into the new year there have been a lot of
predictions on the housing market. Much of these
predictions afﬁrm that if you’re looking to purchase a home,
2016 would be the year to do it.
According to Zillow’s Chief Economist, Svenja Gudell, home prices
are expected to rise 3.5%. Now, how exactly does that make it a
good time to buy a house? Well the price on homes have been
steadily increasing for some time now, at almost double the pace
of wages and 3.5% in fact isn’t that much. So, while the price of
homes have hit the breaks slightly now is a good time to invest.
The Price of Homes Will Increase
Rents Will Continue To Rise
While the increase in home prices might be slowing down a bit, rents
will not. According to rent.com, vacancy rates are the lowest they’ve
been since 1985, currently at 6.8%. Due to an overwhelming demand,
and the underwhelming amount of inventory, there leaves little room for
negation with landlords. %3% of landlords surveyed that they were
more likely to bring in a new tenant, at a higher rate, then negotiate a
deal with their current tenant. Landlords have the upper hand in this
market, 88% of them raised their rents within the past year. At this
point, with rents set to rise by 8% in 2016, people are paying more for
rent than they would on a mortgage for a home. Interest rates on
mortgages would have to increase to 6.5% for the costs of each to be
Mortgage rates are still at an all-time low, for now.
Mortgage rates have hit as low as 3.25% compared to the average
4.02% in 2014, as depicted in housingwire.com. The Federal Reserve
is expected to increase later this year, thus only giving you a few
months to beneﬁt from such a deal. Low interests rates will make for a
more affordable monthly payment, perhaps more affordable than what
you pay in rent each month.
A growing market
While inventory has been lacking, speciﬁcally for ﬁrst-time home
buyers, we’re likely to see an increase in the coming year. More
builders are focusing on development of middle-class and starter
homes. With an increase in overall inventory there is less
competition in the market from buyers. This will ultimately lessen
the likelihood of bidding wars and leave more room for
While there are a variable amount of changes coming for
the 2016 housing market, much of them are making for an
affordable alignment. If you’ve been weary about becoming
a home owner, now might be the time to take the plunge.
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