The interest rates have been at historic lows for a while now, but as those rates creep upward, is it still a good time to buy a house?
The short answer: Yes. But here’s why.
Supply & Demand
It’s true that everyone wants what they can’t have, and housing shortages have sent real estate into a frenzy.
The demand for houses is still sky high and it shows no signs of slowing down. In contrast, because demand is so high, houses are hard to come by. Therefore, the supply-demand dynamics will continue to push home prices up by 8 percent in 2021 – up from the previously predicted rate of 4.2 percent (FHFA Home Price Index). Housing shortages of this magnitude are expected to continue throughout 2021, which will only cause additional price increases and more bidding wars. Waiting ultimately puts you at a disadvantage within the current pricing trajectory.
We seriously can’t stress enough how low supply is. Below you’ll see one of the numbers fueling the shortage.
Part of the reason has to do with homes not being built. Due to unexpected strains on building materials like lumber, newly constructed homes are as scarce as the number of days homes last on the market.
Capitalizing on Mortgage Rates
With the recent buzz about increased interest rates, it’s important to know that the increase is rather modest. On top of that, the higher home price forecast more than diminishes the higher interest rate forecast. Therefore, the mortgage originations are also expected to tick up by 14.5 percent year-over-year in 2021.
So, even with the mortgage rates slightly increasing, they will remain at borrow-friendly rates. This has been one of the easiest decision-making factors for months. Mortgage rates are expected to rise slowly, so there’s still plenty of opportunity ahead.
Buying a home makes as much sense now as it did months ago—the same factors apply. The real estate market has a solid foundation, and it is projected to grow. Why stay on the outside looking in? If owning a home is in your future, then get moving today.
Taking the Next Step
The Keri Shull Team offers priority access to hundreds of off-market homes for a stress-free buying experience. We can help you navigate the current state of the real estate market so you can find the right home for you.