For those of you out there that are on the cusp of buying a home, you should be aware of the recent trends of the housing market now and for the very near future. Know that waiting for 'the right time' may end up costing you big time. Although our economy is considered to still be in historic 'all time low' interest rates, that does not mean that its going to stay like that for much longer. We are seeing the average interest rates ranging from 4.125- 5.125%, which are considerably lower than those of 2008 that were in the 6-6.5% margins. Just in this year, the Federal Reserve is projected to raise the short term rates 3 times in .25% increments each time.
These numbers, on top of the increased demand for houses, and the very obvious deficit in inventory available have created a frenzy in the housing market lately. We have truly entered into a a 'seller's market' as of now and there is no telling when that's going to change. The longer you wait to decide, the more you risk the chance of having to compromise on things like square footage, location, and updates. As of right now, some people are going as far as offering above the asking price when they find a home they want just to make their offer look more desirable to the seller. Multiple bids are being placed on homes, often, even as soon as days after the home is put on the market. Your buying power is being reduced, meaning that the prices of homes are continuing to go up and that you are paying more money for less house these days.
It is also important to remember that if you are shopping at the higher end of your budget, and the rates increase: suddenly, more of your payment will be allocated to the interest and the amount you qualify for will be reduced. A good rule of thumb to keep in mind this home buying season is: "If you sleep on it, you won't sleep in it."