Home prices and interest rates are both going up in our market; however, as you’ll see, this is good news for both buyers and sellers.
Hello raving fans and welcome to the latest edition of my Hot Off the Press Market Report.
Spring is here and people are very confident about the economy right now. Prices are rising—they went up an average of 7.2% across the United States compared to last year. In the video above, I have a few slides to show you that reveal some interesting numbers about our current market and what the future holds for buyers and sellers.
The first is a home price expectation survey of where experts project prices will be over the next five years. There are three different projections ranging from most optimistic to most pessimistic. Overall, they are all projecting prices to rise at least 6.3%, and the most optimistic predicts an increase of 26.7% over the next five years.
These are important figures, and I mention them because as I take these projections and apply them to a house purchased in January 2017, you can see they have a considerable impact on that home’s equity just based on appreciation. Year over year, if you would’ve bought that house for $250,000, it would be worth $292,000 in five years. That means you and your family’s net worth would increase by almost $43,000 just by purchasing a home.
The chief economist from Quicken Loans says “Tight inventory has been a key to contributing factor to the year over year growth in home value prices. This steady growth could very well lead to more availability, driving homeowners to consider cashing in on their growing equity by putting their home on the market.”
He is 100% correct. With prices going up, there’s more equity in every single homeowner’s home. I want to make sure you are aware of that equity, and if you decide to make a move, I’ll help you understand that you have the ability to move because there is extra equity in the house. If you are looking to making a move, now might be a great time.
Interest rates are projected to go up along with prices this year. If you’re looking to buy a house right now, you should be aware of the two things that will determine what you pay on a monthly basis: interest rates and the original price. Both of them are increasing, which is phenomenal.
There is no reason to wait to buy right now; if you wait, you’ll only pay more. Do increases in prices and rates mean that people will stop buying homes? No! Since 1988, the median asking price for rents has steadily increased. Historically, the cost of renting is much higher than the cost of buying. The percentage of income needed to afford median rent is 29.2%, while the percentage of income needed to afford a median home is just 15.8%.
As I keep saying, if you’ve had any thoughts about moving, now’s the time. There are not enough homes on market and there are lots of buyers who can’t find homes. If you’re thinking you can’t get a mortgage, don’t decide anything before you talk to one of our trusted lenders. Just call us at 215-576-8666 for their contact information.
Are you, or someone you know, going to be selling their home within the next 2 years? Sign up for our FREE Home Selling Shark Seminar Tuesday, June 20, 2017 at 6:00 p.m @ The Hilton Garden Inn, Fort Washington. Sign up now! www.HomeSharkSeminar.com seating is very limited for our Spring Seminar and our event will fill up fast!
Stay tuned for my next video where I’ll address the topic of home staging. If you have any other questions in the meantime, feel free to contact me any way you can. I’d be happy to help you.