If you have been thinking about waiting until next year to buy a home, here are 3 top reasons to consider why you should buy a home this winter.
Home Prices are Continuing to Rise
The prices of homes in Oahu have appreciated steadily in the past 12 months. In November of 2018, The median price paid for a single-family home increased by 3 percent to $797,000 and the median price for a condominium increased by 3.7 percent to $420,000. We have also seen an increase in inventory in the latter part of the year which is good news for home buyers.
According to Darryl Macha, president of the Honolulu Board of REALTORS®, “We’ve seen considerable inventory expansion this year with active listings of single-family homes up by more than 28 percent and condominiums up by 14 percent compared to the same time last year. However, more than half of the inventory of single-family homes was priced above $800,000 and nearly half of the condominium inventory was priced above $475,000, so more inventory in the lower price ranges is still needed. Though when you consider the overall conditions including more selection, continued low mortgage rates, and a stable economy, it’s a favorable time for buyers to purchase a home.”
2. Interest Rates for Mortgages Are Expected to Increase Next Year
Most experts predict that interest rates will rise in the coming year. According to Zillow, the 30-year mortgage will only continue to rise throughout 2019. Zillow is now forecasting that the 30-year mortgage will finish up 2019 around 5.8%. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase in 2019.
An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home. Looking to buy sooner than later may be the best option for your family. You should realize though that once you move out of your parents’ home, you are now paying a mortgage, whether it’s your own or your landlord’s mortgage.
3. You Will Be Paying a Mortgage Either Way
You may be going back and forth between renting or purchasing a home because you are uncomfortable with the thought of being obligated to pay a mortgage. The only difference is in the way it’s paid. Once you own a home, your mortgage payment is like “forced savings” that eventually builds equity in your home. As a renter your are helping your landlord pay his mortgage, while allowing him to build up that equity.
The Bottom Line
The “cost” of a home is determined by the current selling price and mortgage rate, and both are on the rise. It’s best to examine your family’s situation and determine if waiting to buy a home is for the best. If you are looking for a larger place for a growing family or wanting to move to a better or safer neighborhood, perhaps now is the best time to buy. Buying a home now instead of waiting next year could help lead to increased saving in the long run.
If you are curious to know about current market conditions in specific neighborhoods, we are more than happy to sit down with you and discuss options for buying a home. Please call Team Lally at 234-4421 to schedule an obligation free consultation with one of our buyer specialists.