Price, Predictions, Prime Time!
The monthly mortgage payment on a home is generally determined by two elements: the price of the house and the interest rate you pay on your mortgage. There are other factors too, like taxes, insurance, and homeowners association dues, but to keep it simple, let’s just look at price and mortgage rate.
HOME PRICE PROJECTIONS. Recently released reports are revealing that the experts expect both of those elements to increase in 2016. Nationwide, a 5.2% home value appreciation for the next twelve months has been projected. This image gives you a breakdown by state. Texas is expected to see a 2.4% increase, although I wouldn’t be surprised if that percentage is higher given what has occurred just in the past 6 to 8 months here in the Dallas-Fort Worth area.
MORTGAGE INTEREST RATES. All four of the entities that provide projections on mortgage interest rates agree: they’re going up in 2016. And if you’ve spoken to me about the market anytime within the past year, you’ve probably heard me say the same thing…rates are going to go up. They really have to, because the “frenzy” that we’ve experienced in this market really can’t continue. The financial powers that be are going to be interested in stabilizing things a bit, and stabilization in this case means an interest rate increase. Here are the predictions over the next four quarters:
BOTTOM LINE: With both home values and interest rates projected to increase over the next twelve months, buying (or moving-up), sooner rather than later, makes sense. Conventional wisdom says that the holidays aren’t a good time to list…well I can tell you that last week was Thanksgiving, I had two clients who trusted what I told them about the holiday season being a good time to sell a home because there’s less competition out there, and one of those homes is under contract and the other has an offer. If the time might be right for you, I’m looking forward to hearing from you soon!