Still got cold feet about buying a home? Wait ’till 2016 rolls around! With the new year upon us, now’s the time for all you renters and first-time buyers out there to start organizing your finances and jump on the homeownership bandwagon.
Of course, it’s totally understandable for it to be overwhelming and even intimidating to jump into homebuyer status, given the recent financial crisis that plagued the nation. But given the key economic indicators that are flashing right now, 2016 is potentially the perfect time to buy.
And here’s why.
1. Mortgage Rates Are Still Ridiculously Low – But Not For Long
If you want to lock into a mortgage, now’s the time to do it. Consumers have had the benefit of low interest rates for quite some time now, but there’s talk of rates finally increasing in the new year. You likely won’t be seeing rates this low for a long time to come, so the earlier you lock in, the better.
As it stands right now, you can still get a rate around 4%. If you can lock a mortgage in while rates are still low, you can knock a good chunk of change off your mortgage payments. Low interest rates makes home buying more affordable. Put more of your hard-earned cash towards the principle instead of flushing in down the toilet in interest payments!
2. Rent Prices Are Forecasted to Spike
Renting might be a good way to get your feet wet in the real estate market, but it looks like rental rates are about to experience an uptick in 2016. In many of the major centers in the US, supply is running low while demand is still strong. This off-balance is causing rent prices to teeter to the side of landlords who are able to charge more for their units as supply continues to remain sparse compared to demand.
In the last year alone, nearly 90% of property managers across the US have jacked up their rent prices, with no sign of that slowing down any time soon. So instead of throwing your money away in rent, you could potentially spend the same amount each month to be put towards home ownership and building equity instead.
3. “Know Before You Owe” Mortgage Regulations Put Buyers in the Driver’s Seat
Ever try to navigate mortgage paperwork? It’s like reading a foreign language if you’re not an agent yourself. And if you’re not careful, you could wind up getting stuck with mortgage terms that you’re not comfortable with.
Well, not anymore, thanks to the new TRID rules that came into effect this past year. Also known as the TILA-RESPA Integrated Disclosure rule, mortgage forms and loan costs are now being organized and stipulated in such a way as to make it a lot easier for the average homebuyer to understand all the terms involved. This gives consumers a better chance to make sound decisions and choices when it comes to their mortgages at the closing table. That way, there are no unpleasant surprises waiting for them once the keys are ready to be handed over.
4. Prices of Homes Will Be Scaling Back
For a while there, it was super tough for the average consumer to be able to afford some of the sky-high prices of homes that have been listed. And it still is in many centers across the country. But these prices are likely to slow down quite a bit in 2016, making home ownership more affordable for the average joe. Just don’t expect this price cut-back to be as pronounced in super-hot markets like San Francisco or NYC, where prices aren’t forecasted to pull back as much in the coming year.
5. More Properties Will Be Making Their Way to the Market
Along with the deceleration of home prices will come more homeowners listing their properties, giving homebuyers more selection. Let’s face it: anyone who’s hung onto property over the past few years has had the opportunity to build up serious equity as prices continued to skyrocket month after month. Many of these home owners want to cash in on that equity, and are more likely to list in 2016 to liquify their money. That means buyers will have more selection when it comes to he home-buying process.
Not only that, but the new home construction market is also probably going to grow in 2016 with builders placing more focus on starter and middle-range homes. That’ll do well to spike inventory and make it easier for homebuyers to snag a place. More homes on the market means the potential for prices to ease off even more.
All these forecasts for the new year point to fantastic possibilities for those who are finally looking to put their name on title of a home. Just make sure that you’ve got a professional real estate agent in your corner who’s experienced in the specific neighborhoods you’re looking to plant some roots in.