Interest rates have begun to rise and likely will climb higher. Inventory is low and could shrink more. And home prices are increasing and not predicted to fall any time soon. With that said, Realtor.com offers these reasons why you might be too late if you don’t jump aboard the real estate train now.
Rates are rising
In 1981, when mortgage rates hit 18 percent and seemed to rise daily, single-digit rates seemed like an impossible dream. Last August, however, rates on 30-year mortgages bottomed out at 3.55 percent. Now that the Federal Reserve decided to raise its key interest rate, mortgage rates have been slowly climbing. Currently, the average rate is just above 4 percent; by 2019 or 2020, rates could easily climb to 6 percent.
Inventory is shrinking
In November 2016, there were only 1.85 million homes for sale. That’s almost a 10 percent drop from the previous year. Real estate experts predict that inventory will continue to shrink, at least for the foreseeable future. That means, in most areas of the country, buyers have more homes to choose from today than they will next year (or even next month). If you get moving now, you’ll have less competition for those homes than you will in the peak spring and summer months.
Home prices are still rising
Home prices now stand higher than before the 2007 crash, increasing 5 percent from 2015 to 2016. And housing experts expect an additional 2 percent to 3 percent jump in 2017. With rising mortgage rates and the new Trump administration, it’s anyone’s guess how high prices will rise and how long they’ll remain high. The good news? If you jump into the market now, you just might make it before those doors close.