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Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. In most areas, prices are still below those of a few years ago. Also, interest rates are still near 4%.
However, sellers should realize that waiting to make the move while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can buy will decrease. Here is a chart detailing this point:
There are many people deciding on whether to sign a new lease on a rental property or take the dive into homeownership. Every situation is different. However, with rents, home values and mortgage interest rates projected to rise, buying now might make a lot more sense than waiting until next year.
Here are others who seem to agree:
An article at NPR:
“Economists see several reasons why 2015 might be a banner year for homebuying — and not just in San Francisco and Miami.”An article on Consumer Affairs:
“If you have been thinking about purchasing a home, the first half of 2015 might be a good time.”An article on Fox Business News:
“As rent increases, it simply makes more sense to buy a home.”
Every home must be sold TWICE! Once to the buyer, and once to the bank appraiser if a mortgage is involved.
“Starting Jan. 26, Fannie plans to offer mortgage lenders access to proprietary home valuation databases that they can use to assess the accuracy and risks posed by the reports submitted by appraisers.” “The Fannie data will flag possible errors in the appraiser’s work before the lender commits to fund the loan, will score the appraisal for overall risk of inaccuracy and may provide as many as 20 alternative “comps” — properties in the area that have sold recently and are roughly comparable to the house the lender is considering for financing but were not used by the appraiser.”Using the additional information provided by Fannie Mae, the lender can then ask for an explanation from the appraisal company for any discrepancies and request an amended appraisal. This added step in the process of determining the price of the home to be bought/sold, could add time to the closing process and cost to the appraisal for the additional work.
“Excessive valuations create the risk of future losses to lenders and investors if the borrower defaults and the house goes to foreclosure.”
“The bottom line, appraisers say, is this could lead to delays to closings and higher costs, as well as a depression of prices in markets where prices are rising. Appraisers complain that if they have to justify every step of their comps for their valuation, rather than those coming from the one-size-fits-all evaluation from Fannie, it will delay closing, throw off buyer and seller timetables, and delay real estate broker commissions.”
