Tips From Realtors
The State of the Market
Purchasing a home is one of the most complex – and most personal – financial decisions that you will ever make. Your decision on when to buy your dream house or condo will be driven by a variety of personal factors specific to your life circumstances. Are you planning to start a family soon? Have you made a long-term commitment to your community? Have you begun to put the other pillars of your financial life (retirement, emergency savings) into place?
But as personal as the decision is, you can’t separate your home purchasing decisions from trends in the broader marketplace. Even the most devoted readers of the business page may struggle to put the economic news of the day into perspective for their real estate decisions. Is this a good time to apply for a mortgage or should I wait until next quarter? Am I going to be kicking myself for passing up easy money when mortgage rates go up?
We’ll Guide You Through the Process
At ATM Lending, we can help guide you through your purchase with our extensive knowledge and experience in the market. We view each of our clients as people first, taking the time to personally understand their situation and financial goals.
We can also help put broader market trends into perspective. If you have been wondering how the latest financial chatter from Wall Street and Washington could affect your ability to borrow a down payment, we can help clarify the noise.
Frequently Asked Questions
As with almost anything in real estate, the answer is likely “it depends”, based on your personal circumstances. In the long run, home ownership is almost always the most assured way to build lasting, generational wealth. Over the short term, the country-wide market is likely to cool considerably from recent years thanks to a combination of creeping prices and changes in the federal tax code that may discourage some buyers in pricier markets. Some of the country’s priciest markets have seen an end to popular homeowner tax breaks, driving the prospect of depressed buying in the years ahead. Over the near term, keep an eye on the weather too – even in sunny Florida. More customers tend to begin their house hunting in the spring, driving up competition for choice properties.
Widespread speculation that mortgage rates will rise to 5% – levels not seen in more than 5 years – has driven fears that more potential purchasers will stay parked in their rentals. The real estate app Redfin found that more than a quarter of homebuyers would rethink their decision to buy based upon the prospect of these higher rates. Given recent volatility in the stock market and related Treasury bond yields, we are indeed likely to see increased rates for mortgage borrowers. This increased rates could also have the net effect of persuading more current homeowners to stay put rather than move elsewhere, creating more bottlenecks throughout the wider market. The prospect of more expensive loans only underscores the necessity of aggressively saving to build up the largest down payment you can manage, helping to ultimately reduce costs such as private mortgage insurance.
This year could potentially see the first year of declining home sales since the market crashed in 2008. This is partially due to projections of the median home price increasing by around 2% to $253,000.
While it’s good to stay informed about current trends, don’t let social pressure dictate your decision making process. Keep an eye on what’s happening in the news – but don’t let your emotions or a gut instinct rush you into making a rash choice. Contact the team at Atlantic Trust Mortgage and we can help you map out the right purchasing strategy for you.