As we have been reporting in recent blogs, the real estate market is enjoying an exceptional upswing this year.
For once, the stars are all aligned to create an almost perfect ecosystem for positive buyer sentiment. What's even better is that ideal conditions for buyers equal a great time to sell your house too.
When the history books are written, it might well be that we all look back on this year as the opportunity of a lifetime for many buyers and sellers.
Here's why we say this: -
1. Lower entry cost of home ownership - We probably don't need to say too much more about low mortgage interest rates. Today the average fixed interest rate for a 30 year home loan stands at 3.68%. This is no flash in the pan statistic either, as rates have been low for some considerable time now - one of the main reasons for so much enthusiasm among buyers. They know these low rates won't last forever and are locking in a rate now, which will reap relative cost savings each and every month throughout the term of the mortgage.
Such low rates also mean that in the first quarter of this year there has been a mini-boom in refinancing. So if you're paying much more interest than the current going rate, now might be a great time to go over your refi options with a financial advisor.
As if all that weren't enough, many qualifying buyers are now able to obtain mortgages with down payments as low as 3%. This has a profound effect on a wide range of potential home purchasers who meet all the criteria to qualify for a loan, but just don't have enough saved for a high down payment.
2. Better confidence in the economy - The years of recession are now thankfully well behind us and prospects for jobs and the economy are a lot stronger than they have been since before the 2008 crash. It's not all plain sailing, however, as the economy is still in recovery mode and economical reports are often a mixed bag of good and not so good news (this is helping to keep mortgage rates down). In general, though, confidence is on the rise and is making a major contribution to buyer sentiment and the notion that right now is a great time to start climbing the property ladder, either for the first time or to upgrade.
3. Home prices remain sensible - Home prices are generally increasing, as one would expect when there is more demand. However we haven't seen anything like the galloping house price inflation that occurred in the past. 2015 is therefore proving to be a great year to make an affordable move.
4. Renting isn't getting any cheaper - Renting has gotten more and more costly over the past five years or so. Rises in rents are actually more than double the rise in US home prices for this period. The average US rent has risen by 14% to $1124 since 2010. There is little or no possibility of a reversal in this trend and so, with other incentives like low mortgage rates and low down payment options, it makes complete sense to stop contributing to the wealth of your landlord and to start to build you own equity base with a home, which has been proven time and again to be about the best investment possible.
5. Nothing lasts forever - Although experts have predicted strong housing market growth until at least 2017, it's also true that there is no time like the present to capitalize on a great opportunity. Mortgage rates simply have to rise at some point and, let's not forget, next year is an election year, so a possible change in the political landscape could create a very different set of buying and selling circumstances. We just don't know what lies ahead, and that's probably why we're seeing such incredibly high levels of activity as we move into the busiest period of the year in real estate.
If you've been on the fence about buying or selling a home, we hope the above reasons give you ample reason to call us today and discuss why this year might be an opportunity that won't be repeating itself in quite the same way for a very long time to come.