As mortgage rates tick up and home prices make a positive ascension, home buyers and sellers alike are feeling torn between the wait and see attitude or making a move now. Both rising home prices and higher mortgage rates were inevitable as recent news reports would attest. Mortgage interest rates have crept up in three of the last four weeks and while big increases are unlikely, further drops are too. Home prices are also heading up due to a number of factors. The improving economy has been a huge influence with each increase.
While homeowners sift through the news of a housing market rebound, home buyers are anxiously waiting for more housing inventory to hit the market. That’s the dilemma both sectors now face. Current owners expectations that home prices will continue heading north are the main reason homeowners are delaying the sell of their current residence. Buyers on the other hand are attempting to take advantage of mortgage rates before they continue the upward trend.
The average for a 30-year fixed rate hit 3.53% this week, the first time rates have been above 3.5% in over three months. The rest of 2013 should see rates gradually rise, ending the year at 3.75% and then moving above 4% next year as the economy continues improving. Home prices are rising in all of California. Davis and Woodland are no exceptions. Statewide job growth and a balanced state budget are contributors to home price escalation and the expected increases for the future. How this news affects sellers and buyers are unknown, but here’s an opinion.
Affect on Sellers: It’s fairly obvious, sellers are banking on housing prices to continue moving up. This strategy is sound for the most part, but there’s a couple of concerns that owners need to consider. A high percentage of owners will sell and purchase a replacement home. A good portion of those sellers will buy a larger more expensive property. You might get more for your home, but you’ll also pay more for your replacement home. The other point of concern, if mortgage rates move higher that gives your home fewer buyers to choose from. Supply and demand at work.
Affect on Buyer: With the changing tide, most buyers have given up hope of finding their perfect home and have settled for the imperfect home. With the limited inventory, a home with flaws has become acceptable for the majority of prospects. The rise in rates and prices have created the buying frenzy that now exist. 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.