The New York Times Agrees: Now Is the Time to Buy
Mortgage rates are expected to rise slightly over the year and home prices are expected to rise rapidly. Many homebuyers may be wondering, “Is now the time to pull the trigger?”
For most, the answer is yes. Home prices are rising across the nation and while rates remain low, it is a great market for homebuyers.
In Atlanta, we saw home prices jump up 10 percent in 2012 – the largest gain since January 1991. Nationally, home prices went up 7.3 percent in 2012. According to Zillow, home prices in residential markets in the California, Phoenix and Las Vegas areas are rising at double-digit rates. Economists collectively expect to see more of the same throughout 2013.
While prices are jumping now, rates are holding steady. But the same cannot be said of rates over the coming year. In a previous post, we mentioned the rate changes we expect to see this year as the economy picks up.
“When rates are rising, it’s because the economy is improving,” Jed Kolko, chief economist of Trulia.com said in an interview with The New York Times.
Homeowners looking to refinance are perhaps even more sensitive to changing rates than homebuyers. For those refinancing, upticks from the current attractive lending rates could affect decisions.
It is predicted that by year-end, the 30-year rate will be about 4.4 percent – up from current averages around 3.5 percent. Refinancing volume is expected to shrink with the uptick in rates so those eligible and interested should act now.
For homebuyers, pulling the trigger takes advantage of both the increasing home values and low interest rates while the economy is still in recovery mode. Right now, homebuyers are in the best position to put down a down payment and qualify for mortgage financing.
“Getting in a little earlier would be preferable before prices and rates rise too much,” Lawrence Yun, chief economist of the National Association of Realtors said.
But according to Yun, homebuyers should be aware of the tradeoff that comes with taking advantage of the current opportunities. Inventories are tight in many markets so homebuyers will have fewer choices in order to get the best financial deal. Conversely, waiting for more choices could outlive the current market’s opportunities.
The financial decision of homeownership is one that requires thought and research. For now, the research indicates that now is a good time to act.
– J.D. Crowe, Senior Vice President of Southeast Mortgage