Home prices and mortgage rates are rising, but there is still a crop of home buyers out there who are pondering whether now is the right time to buy a home or whether they should continue to wait a few more months.
Have they missed the boat completely, or could waiting pay off?
Mortgage rates have jumped more than half a percentage point in the last few weeks, with more jumps expected in the coming months. While rates are still low from a historical perspective, any rate increase impacts housing affordability.
However, rising interest rates will also likely mean the pace at which home prices are rising will slow down, according to economists.
Home prices may fall slightly – up to 1 to 3 percent – as buyer demand dips seasonally, says Amy Crew Cutts, senior vice president and chief economist for Equifax.
“But if interest rates jump another half percentage point, you may lose that price advantage to higher interest rates and monthly payments,” says Ilyce R. Glink, author of several real estate books.
While existing and new home sales have risen in recent months, they remain below their pre-recession peaks, says Cutts. Single-family housing starts are still about 60 percent below their pre-recession peak and existing-home sales are about 38 percent off their peak.
“Even with large percentage gains in housing measures, all major indices of housing market vitality point to a long recovery yet to come,” she says.
Source: “Real Estate Matters | Betting on the right time to buy as interest rates jump,” The Washington Post (July 2, 2013)
No comments:
Post a Comment