What You Can Expect When Buying A Home In 2018

What You Can Expect
When Buying A Home
In 2018
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Before hauling off to buy the first home you see, be sure to first
consider these three factors:
Home Prices. According to experts, home prices will continue to
rise in 2018 but at a gradual rate. Several markets — like Seattle
and San Francisco, for example — have appreciated faster due to
and increased population, economic growth, and well built public
transportation infrastructures. However, the nation’s home prices
as a whole have increased relatively consistently. The Case-Shiller
Index shows that over the last two years, home prices have been
rising about five to six percent per year on average. While that
statistic might sound nominal, it is actually an increase compared
to years past. Looking back over a longer period of time,
property prices have appreciated about three percent, making
the five to six percent statistic higher than the historical norm.
What should this mean to prospective buyers? Don’t wait!
Mortgage Rates. Many people expect mortgage and interest rates
to raise in 2018 as the Federal Reserve continues to tighten its
monetary policy and make moves towards decreasing its balance
sheet. However, this prediction has been spiraling through the
real estate industry since late 2016, which makes it difficult to
know if and when a notable hike will occur. Over the past year or
so, mortgage rates have hovered between 3.9 and 4.5 percent —
a less than significant increase. Some experts hypothesize that
rates will hit five percent by the second half of 2018, but there has
been no official confirmation one way or the other. One thing is
for certain, buying a home at the beginning of 2018 will ensure
homeowners a locked in low rate compared to decades past.
Supply and Demand. Because home prices have been
appreciating, many hopeful buyers are finding it difficult to make
a purchase within their financial reach. Even current homeowners
are opting out of buying newer, bigger, better homes — trading
up, if you will — for the same reason. This is making it even more
difficult for first time buyers because the supply of starter homes is
less than ever before. The increase of both rent and home prices
mixed with stagnant wages for many is leading to the
combination of high demand and low supply. While this may
make it harder for first time homebuyers, investors who own
passive income properties should benefit from the current state of
the market.