Have you resolved to buy or sell a home this year? Or maybe both? Here are a few things you can expect to find if you’re entering the housing market in 2016:
1. Interest rates will go up
This is not really news. Experts have been predicting an increase in mortgage rates ever since the Fed announced it would raise at the end of 2015. Also, interest rates reached historic lows by the end of the 3rd quarter last year, so there is really nowhere for them to go but up. However, according to an article appearing on NBC News, the rate increase is not expected to impact sales, since the price of a home loan will continue to remain below the historic average of 6%. In fact, the still relatively low rates paired with decreasing jobless numbers will most likely cause an increase in sales.
2. Home prices will rise
The S&P/Schiller-Case U. S. National Home Price Index was released last week for October, and prices continued to rise, more than 5%. Chairman and managing director of the index committee at S&P Dow Jones, David Blitzer says there is no reason this trend will not continue into the new year, and that it is indicative of a stronger housing market in 2016 and a stronger economy overall, but that issues could arise for consumers if prices continue to increase at a greater rate than inflation. See Blitzer talking to Scott Gamm of financial media site, The Street.
3. Rents will increase
Though the rate of increase is expected to slow somewhat, rents will continue to rise in 2016. This is due to a myriad of factors, according to economist and Forbes contributor, KC Sanjay. Among these factors are a general preference for renting over buying, and the fact that young people are waiting longer to settle down, get married and start families–often contributing factors to the decision to buy a home. Sanjay says this trend will most likely continue for the time being, but could eventually be slowed by the ever increasing supply of apartment homes due to new construction.
The good news is, all these factors point to positive growth in the housing market, and they don’t necessarily mean that it will no longer be affordable to buy a home. In a way, it’s not a terrible time to buy OR sell a house, if you’ve decided this is the right time for you to do so. You can still get a mortgage at a fairly low rate, and if you’re selling, houses are no longer at rock bottom prices. Further, if you’re renting currently, this might not be a bad time to get out from under rates that are only going to go up.
For more information on mortgages and rates, visit goldenstatemortgage.com