With a real estate magnate moving into the White House, many are wondering about how that will influence the real estate market, and many more are wondering if it's a good time to buy. While some are confident in the direction a Trump presidency will take the economy, others are concerned about his economic-growth plans igniting inflation, which will, in turn, raise mortgage rates. Essentially, if you've been considering buying a home in 2017, now may be the best time to do it.
Housing prices have been on the rise since hitting bottom in 2011, and currently, we're seeing the highest median home prices in ten years, a 40% hike in the last five years alone. Fortunately, low mortgage rates have still managed to keep homes affordable. According to the National Association of Home Builders (NAHB), roughly 60% of homes are considered affordable to a typical family due to low rates, compared to an average of 75% being affordable in 2012. As an example, the national median home price was $231,000 in the third quarter of 2015, and one year later, it was $247,000.
What this means is that prices are on the rise, and though mortgage rates have been increasing gradually, they have still been increasing. Although rates were in the 2's and 3's for most of 2016, after the election, they rose to a 7-month high, ending out the year at 4.13%. They are still lower than they've been in the last three years, but it's hard to say how long they will stay this low.
Granted, we've still got a ways to go until we get back to the crippling rates of the nineties. That decade started with a rate of 10.13% and by 1996, the average was 5.67%. While mortgage rates may not exceed 5% in 2017, they are still expected to rise by housing economists from the National Association of Realtors, the Morgate Bankers Association, Realtor.com, Fannie Mae, and Freddie Mac.
The good news is that if you are looking to buy a home in 2017, you have buying power if you can get pre-approved for a loan and lock in these low rates. There is no telling what the market will do after the first hundred days of the new presidency, but if the upsurge in the stock market after the election is any indicator, and if the expert economists are to be believed, currently the rates are good for the long-term buyer to invest or for those looking for a new home.
Contact me today if you're ready to start looking at homes in Sarasota.
Sarasota Area Real Estate Specialist