At the dawn of the New Year, if you had asked an expert about the state of the market throughout the upcoming months, odds are they would have predicted a much different scenario than the one we face today. In fact, many are still surprised that things have remained so stagnant over the months. Clearly affordability still holds many potential buyers back – especially those who are young and do not own a home already – but in truth, now may be the best time to buy a home all year, and here’s why:
1. Mortgage rates are low
To start the month off, mortgage rates dropped again- at their lowing since the beginning of November in 2013. According to the latest Freddie Mac Primary Mortgage Market Survey, the average 30-year, fixed rate mortgage dropped to 4.21% for the week ending May 8, 0.08% lower than one week before, but up from 0.79% from the same week one year prior.
“Mortgage rates continued moving down following the decline in 10-year Treasury yields after a dismal report on real GDP growth in the first quarter,” stated Frank Nothaft, vice president and chief economist of Freddie Mac.
2. Home prices are going up
Home prices have been on the rise for over two years now, according to CoreLogic’s March HPU Index. Along with increases in the inventory of existing homes on the market, home prices nationwide have increased by 11.1% in March from the year before.
CoreLogic’s forecast also indicates that home prices are projected to increase another 0.8% month over month from March to April 2014, and by an additional 6.7% from March 2014 to March 2015.
3. Most markets have recovered
According an index of markets from the National Association of Home Builders/First American, fifty-nine metros have made a full recover from the last housing collapse.
The nationwide economic score rose slightly to 0.88, up 0.01 from a revised April reading, and an additional 0.06 from the year before. This would mean that based on current permit, price, and employment data, on average the nation is running at 88% of normal economic and housing activity.
“Our builder members tell us they are starting to see more optimism in the field,” said NAHB chairman Kevin Kelly. “Mortgage rates are low, home prices are affordable and with the harsh winter behind us our latest surveys show builders are feeling more bullish about future sales conditions.”
Do you agree that now is the right time to buy, or should potential homebuyers hold off until a later day? What are your thoughts?
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