For all of your adult life, it’s very possible interest rates have been at rock-bottom levels. The U.S. Federal Reserve has kept benchmark interest rates at zero since 2008, and 30-year mortgage rates are below 4%, which is a level not seen since the spring of 2013.
At Trumark Homes, we can help you capitalize on the current conditions in the real estate market so home ownership will become more than just a dream but a reality for you.
Economists differ in their opinions about when rates will rise, but Fed officials have hinted that incremental increases may begin in the second half of 2015.
Using that as your guide post, it’s clear that now is a good time to act if you’ve been thinking of purchasing your first home.
While it seems the Fed will take a slow-and-steady approach to lifting rates, the last thing you want to do is get left behind in the low-rate environment.
And it’s not just the low-rate environment that makes now an attractive time to enter the real estate market. There are several catalysts that when taken together suggest the stars have aligned to make 2015 an ideal time to buy a home outlined below.
— Interest Rates: As noted, 30-year mortgage interest rates are hovering at levels not seen in a couple of years at about 3.83%. If you are able to afford a higher mortgage payment you may qualify for a 15-year mortgage. Your payments will be higher because you are paying off the mortgage in half the amount of time as a 30-year mortgage, but the interest rates are lower. The rate on the 15-year mortgage is currently at about 3.05% versus 3.56% in the year-ago period.
— Costs: You may think the cost of home ownership is just too high. Perhaps your income hasn’t quite reached the point where you can afford the house of your dreams. Don’t count yourself out. The federal government in January lowered the cost of housing insurance that in turn will mean lower mortgage payments for you. Specifically, the cost for a Federal Housing Administration mortgage, which is designed for low-income individuals, has gone down to 0.85% of a borrower’s mortgage balance from 1.35%. That will save the average homeowner about $900 annually, according to Bloomberg.
Valuations: The California Association of Realtors projects home prices will rise 5.2% in 2015, which is a slow pace by historical standards, according to a report in the Los Angeles Times. Nonetheless prices has firmed up enough to the point where sellers believe they can get a fair price for their home. These conditions will likely bring more sellers to the market in 2015 versus last year. The LA Times report suggests there will be a greater “balance’ of buyers and sellers this year, which bodes well for the housing market.
Buying a home can seem like a daunting task to someone who is new to the market. As long as you turn to the experts, you can rest assured that you will have success in your pursuit. When you decide to take that first step toward home ownership, contact us. We will help you find your piece of the American dream.