If you have been thinking about buying a home, 2015 may be your year. Several economic factors are in play to make 2015 the time to make that move.
MORTGAGE INERTEST RATES ARE STILL LOW
This narrative has not changed for years. With mortgages hovering around 4%, the days of historic low rates may be coming to an end as the economy improves. The lowest rates in modern history were back in 2012 and have been inching up ever since. The lower the rate, the more house you will be able to afford, it’s that simple.
THE ECONOMY IS IMPROVING
Unemployment is below 6% verses almost 10% in 2010. Consumer spending is up and the stock market set an all-time high in 2014. The downside of all this is interest rates raise as the economy improves.
RENTS ARE AT A RECORD HIGH
Every renter knows rents have skyrocketed over the past couple years. Some Denver-metro areas have seen an 18% increase in 2014 according to Zillow. The demand is still very high and there is no sign of rents lowering in the near future. Interestingly the same research shows on average homeowners spend 15% of their income on a mortgage compared to 30% for renters. The tax benefits and building equity that bonuses of homeownership are another reason to consider making that move.
DEMAND FOR HOMES ARE READY TO SURGE
Demand is already high for those looking to buy but will likely increase in the coming year. With all the above factors convincing buyers to consider homeownership, prices will reflect the supply and demand in the market. During the economic downturn, construction all but stopped creating the pent-up demand we see now. As population increases and more buyers enter the market there will continue to be increased pressure for homes in the coming year.
IT’S NOT JUST A HOME BUT AN INVESTMENT
This is something a buyer should discuss with their financial professional but on the whole as long as you get good advice from your real estate broker and your lender, a home is a hedge against inflation. In an inflationary environment when prices of goods and services rise, a major asset such as a home purchased at a fixed monthly cost becomes more valuable.
Everyone knows that real estate prices can rise or fall depending on market conditions. Buyers can continue to wait for the “ideal” market but 2015 will ring in low interest rates, rising rents, and rising demand which could make this a great year to make that move.
Author:Jeff McGahey Phone: 720-309-2059 Dated: December 30th 2014 Views: 1,961 About Jeff: As a Colorado native, real estate broker since 2006, and real estate investor for over 15 years I ha...
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