2018 is shaping up to be a great year to purchase a home.
With mortgage interest rates still hovering at historic lows, the overall cost of home-ownership is relatively low.
Home prices have come back since the real estate bubble burst in 2008 – and has seen consistent growth, fueled by extremely low interest rates on home purchases.
With the economy raging and the federal reserve looking at raising rates to avoid inflation – there has never been a better time to purchase a home.
Interest Rates Affect Home Ownership
Most people are aware that the cost of home ownership is affected by mortgage interest rates — just not to the extent that it actually is. The difference in the rise of your mortgage rate by 1 percent — has a tremendous effect on how much your home costs. Many people think that negotiating the sales price on a home down by $5,000 is a huge thing — but truth is, that $5,000 is dwarfed by even a small difference in mortgage rates.
2018 is a Great Year to Sell Your Home
2018 is shaping up to be a great year to sell your home. It may seem counter-intuitive that its a great time to buy AND a great time to sell. How can that be? It seems as if its a sellers market than its a great time to sell but if its a buyers market — it may not be the best time to list your home for sale. Truth is…its back to those interest rates!
Currently, we see a good bit of demand for housing — many real estate markets have had a great year in 2017 based off of the local demand for housing. Even though home prices are expected to continue to increase; the increase in housing prices are minimal when compared to even a small increase in mortgage interest rates. If rates rise, even with the demand for housing, even the best real estate agents who are doing everything possible to increase your homes viability to sell — will have a hard time selling a home.
Affordability of Housing
At the end of the day, it all comes down to affordability. There are many factors that affect the cost of home ownership. When people are looking at moving from a renter to a homeowner, their overall monthly spend is what is looked at. That includes their homeowners insurance, mortgage interest, costs of upkeep taxes and maintenance. Same thing applies when people are selling their home to either downsize or get a bigger home. So regardless there is huge demand — the mortgage rates available make a huge difference in if people are buying homes — and at what prices they are buying homes at.
Good for Buyer and Seller
With all of that said — with the current demand for housing coupled with the low interest rates — we think that 2018 is a GREAT time to either buy or sell. Once the mortgage interest rates go up (and most economist believe they will) it hurts for both the home seller and the home buyer.