We are seeing homes move extremely fast this Spring 2017 and this is expected to continue into the Summer. There is no time for you to wait and think about homes.....you literally have to get out there and go see the home the day it hits the market or you run the risk of watching it go Pending before you even get a chance. The days of seeing a home come on the market on a Monday and scheduling it with your agent to see on the weekend are over. Homes that have desirable updates and good school districts are going into multiple offer situations. You really have to be on your game if you want a shot and when you do take that shot.....it better be good. You need a smart agent in your corner to make your dreams come true or you will likely lose out. With rates anticipated to rise into next year, it is your best interest to take advantage now before it affects your buying power.....every 1% increase in rate affects your buying power by approximately $30,000 or 11%. This in turn has a great impact on your DTI or debt to income ratio.
If you are considering moving up to your dream home, it may be better to do it earlier in the year than later. The two components of your monthly mortgage payment (home prices and interest rates) are both projected to increase as the year moves forward, and interest rates may increase rather dramatically. Here are some predictions on where rates will be by the end of the year:
“While full employment and rising inflation are signs of a strong economy, they also have the potential to push mortgage rates and house prices up. The higher rates and higher prices create significant affordability concerns, which may continue to characterize the housing market for the rest of 2017.”
“By the time we get to the fourth quarter of this year, we will still be under 5 percent – we are thinking 4.7 percent…Something north of 5 percent by the time we get to 2018, and by the time we get to 2019, we show fourth-quarter rates hitting 5.5 percent.”
“Despite some regional disparities, title agents and real estate professionals do not expect increasing mortgage rates to have a significant impact on the housing market this spring. Continued good economic news, increasing Millennial demand and confidence that buyers will remain in the market even if rates exceed 5 percent bode well for 2017 real estate.”
“We will probably see rates higher at the end of year, around 4.5%.”
If you are feeling good about your family’s economic future and are considering making a move to your dream home, doing it sooner rather than later makes the most sense. See the graph below.