Just a few months ago, analysts were predicting 2016 to be the year of rising mortgage rates, but January’s stock market volatility has proven otherwise. So, if you have been holding off on buying a home, you may want to reconsider. According to recent articles from the Chicago Tribune , Crain’s and CNN Money, there are several factors influencing how the real estate market will perform this year.
Despite the Federal Reserve’s December increase, mortgage rates have actually gone down. A 30-year mortgage is currently under 4 percent. Of course, the stock market plays a daily role on the real estate front, but those who are looking to buy, or refi, are in a good position to do so. According to the Chicago Tribune article, Fannie Mae economist Mark Palim anticipates mortgage rates will rise in 2016, but the growth will be gradual.
CNN Money says another factor helping boost buyer confidence is home prices are expected to even out. This varies from market to market, but overall, home values are expected to stabilize. Another bonus for buyers, inventory is set to increase. Inventory, or the number of homes for sale at any one time, plays a large role for both buyers and sellers. The more homes for sale, the more options, and bargaining power, buyers will have.
Rental costs are another reason you may want to consider owning sooner than later. According to Crain’s Chicago Business, the median net suburban rent per square foot rose 5.5 percent in Q3 of 2015, 25 percent higher than in 2009. DuPage County was slightly lower, but still increasing 4.6 percent from 2014.
While the economy, mortgage rates and rental costs play a factor in the overall housing market, buying a home is still a very personal decision. If you have any questions about whether it is the right time for YOU to purchase a home, the McCleary Group can help. Please feel free to contact Megan McCleary and Tom McCleary here.