Real Estate 2016: 4 Reasons To Move Now
1. Mortgage Rates Expected To Climb
Home affordability has been at an all-time high because average home mortgage rates have hovered below 4% all year long. However, Freddie Mac, the government-owned holding company that sells and buys mortgage securities, issued their 2016 mortgage forecast predicting a rise. They are expecting to see the average rate steadily climb above 4%, with 30-year fixed mortgage rates near 5.2% by the end of 2016. The increase is stemming from the Federal Reserve's move to raise short-term interest rates because the economy is strengthening. This means that hopeful homeowners may want to jump on the home hunt now to secure a lower mortgage rate before they increase later in 2016.
2. Slower Median Home Price Growth
As mentioned above, 2015 saw an annual median home price growth rate of 6% and the chief economist at the National Association of Realtors is anticipating a slower and lower rate at 5% for the new year. This is good news to buyers in 2016 because median home prices will remain relatively affordable. On top of that, 39% of Gen Y buyers are looking to move out of rented spaces or their parents' homes, in favor of buying a home since the market is more affordable than ever.
3. Energy Efficiency Is All The Rage
84% of recent homebuyers said that heating and cooling costs are the most important environmental consideration, making new construction residences more desirable as they typically have the latest energy efficient features. In addition, the beginning of the year is typically less saturated with buyers and inventory, which means house hunters can take advantage of less competition and the influx of availability in new construction developments. Scoring an energy-efficient home early on in 2016 could be in the form of single-family homes, condos or new townhomes in NJ that have mass availability compared to previously-owned, older homes.
4. Make Settlement Before Spring 2016
According to the National Association of Realtors, homebuyers took an average of 10 weeks of searching for a home and toured a median of 10 homes before they made a purchase. Since home prices generally begin to increase in the spring, it's wise to make the decision before the prices go up. Additionally, buyers who used the internet were more likely to find more options on the market compared to buyers who did not use the internet, as they only searched for an average of 5 weeks and only toured a median of 5 homes.
As we near the end of the 2015, keep the above factors in mind so you can get the best deal on a new home in 2016! Consider looking into pre-approved mortgages, finding a real estate agent and scouting out new townhomes, condos and houses in your desired location so you can be ready for the market next year.