Predicting the future of real estate is not as easy as forecasting the likelihood of triple-digit temperatures in Davis during the summer. There are a few housing predictions that are guaranteed after the boom and bust years. Home prices can’t continue rising or falling through infinity and the same philosophy holds true for mortgage rates. The combination of low home prices and weekly drops in mortgage rates will have to increase in the near future.
Interest Rate Increase:As the government starts to leave the mortgage market, private industry will step in. Private industry demands a higher rate of return on their investments. Mortgages will be no different. Studies have shown that 30 year mortgage rates could increase by 1 to 3% over the current rate.In many higher priced markets, rolling back Conforming Loan Limits means that rates for the mortgages on these properties will resort back to the rates on private jumbo loans. The FHFA informed us that last year, the difference between mortgage rates for jumbo loans and jumbo-conforming mortgages has varied between about ½ and ¾ of a percentage point.As the economy gets better (and I believe it will), the pressure to keep rates low to stimulate growth will disappear.
Home Prices Increase: The all time low mortgage rates have created huge demand for the few homes on the market, which will surely force an uptick in housing values. Inventory will probably stay relatively low in the coming years, because of so much lost equity over the last five years. Currently in Davis and most parts of the country, there are way more buyers than homes to buy. That trend will ensure prices elevate.
Timing is Right To Buy: There’s a right time for selling and a right time for buying. If you can wrangle your way through the loan process, there hasn’t been a time in the recent past that was a better time to purchase a property. Waiting and hoping mortgage rates and or prices continue dropping are the wisdom of the nonsensical.
Pride Of Ownership: Many families that purchased their home during the boom and lost it to foreclosure or a short sale would probably not agree, but pride of ownership is now back in vogue. Many mortgages are now equal to a monthly rent payment. Buyers are now feeling comfortable with the direction of the housing market. These are four crucial reasons you don’t want to wait to buy a home. Take advantage of the opportunities while they last. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.