“If you’ve been on the fence about buying a home, 2016 is the year to take the plunge,” according to Kathryn Vasel of CNN Money. This article outlines 4 of the reasons why next year will be a great year to become a homeowner.
A number of factors are coming together, making next year a good time to buy.
Real estate values have been on the rise for a while, but are likely to slow their pace next year. Prices are expected to rise 3.5%, according to Zillow’s Chief Economist Svenja Gudell. Buyers who’ve been stuck behind the wave of rising prices may finally get the chance to jump in. And that could lead to a flood of buyers, said Jonathan Smoke, chief economist at Realtor.com.
“We have the potential for about six million home sales just through the months of April through September; that is basically impossible to do,” he said.
The new home market is also expected to grow in the coming year with builders focusing more on starter and middle-range homes, which will also boost inventory and make it easier for buyers.
The Federal Reserve is widely expected to begin increasing interest rates soon, which means the window for record low mortgage rates is closing.
While rates are expected to go up gradually, higher rates push up borrowing costs and monthly mortgage payments.
“You are likely to get the best rate you will possibly see, perhaps in your lifetimes through the majority of next year, but certainly, the earlier the better,” said Smoke.
Rent prices are expected to continue to climb in the new year, which means in most cities, buying will be cheaper than renting.
