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Economic Housing Outlook
This week I sat for two events that projected the housing outlook for the next 18 months and I wanted to share some of what I learned.
First the economy is beginning to rebound from the last few years of recession. The people who have been out of jobs, taken lesser pay/skill jobs, and those that gave up altogether are beginning to see jobs coming back. The slump in gas prices we all enjoyed at the beginning of the year did not increase spending but caused more savings. These are positives in terms of economic growth of our country! On the downside of this interest rates are expected to rise. (Slow but steady.) Projected mortgage interest rates in about 18 months are expected to be in the mid 5% range. With that rise the values of existing homes in the 3-5% range many buyers like yourself will see your purchase power decline.
What is happening right now? There has been a decline of bank owned (foreclosure) homes as we get further from the drop in values we saw in the late 2000's. Short sales are more prevalent however the current lenders are working harder to reduce the approval time allowing these home to turn over faster. Those who have lost their homes to short sales are finding they can return to homeownership just two years after settling on their short sale. And of course the regular sales caused by job relocation, death, marriage, or divorce are still driving home sales.
So what is the bottom line? As we head into the spring market and with interest rates still reasonable now would be the time to jump down off the fence and get into the housing market. As we go into the next 18 months the home you can afford today will not be affordable when rates rise and values increase.
Do you have a trusted advisor that spends the time to know the market trends? Did you know that when you hire an Agent to help you find and purchase a home they are paid by the Seller yet represent you? All that experience and knowledge and you don't have to pay for it! Want to know more, lets meet for a no obligation coffee one day soon.