Are you ready to quit renting? Are you thinking this is the year to buy your first home? Or are you ready to upgrade to your “forever” home? Maybe you want to downsize and think about retirement? There are two things to watch this year (and every year!) – interest rates and inventory!
Interest rates had been on the rise for much of 2018, but they made a welcome reversal at the end of the year. According to Freddie Mac’s latest Primary Mortgage Market Survey, rates climbed to 4.94% in November before falling to 4.62% for a 30-year fixed rate mortgage last week. We can hope that rates will stay in the 4% range but unfortunately that’s not expected. Rates are expected to move into the 5% range in 2019. As interest rates climb, it affects your purchasing power. Here is a graph that gives an example of the affect of the interest rates and your monthly payment.
Inventory is another piece of the puzzle. A “normal” market means that there is a 6 month supply of home for sale in order for prices to increase only with inflation. According to the National Association of Realtors, the current inventory is at a 3.9 month supply – which is part of the reason home prices have continued to increase. This is a trend to watch – if we continue to see more homes listed, we should move from a seller’s market to a more normal market.
Are you thinking about buying? Getting your mortgage approval is the first step and then you will be ready as you watch interest rates and inventory. That way you will be ready when you find that home you want!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc., An Equal Housing Lender, NMLS#150953 – Email – Website
