If you’ve either waited or haven’t been in a position to buy a house before, 2016 could be your year. Although interest rates have been at historic lows for some time, other factors have kept many people out of the homebuyer equation. Why could 2016 be your year?
Low Interest Rates
Even if interest rates rise, the gradual upswing is still good news for potential buyers. The first part of 2016, in particular, will be a great time to buy either a newly built or existing house and still take advantage of low interest rates. Low interest rates mean that you are able to pay off your mortgage faster, and your monthly payments are lower.
The Rise in Home Prices Slows Down
If rising home prices kept you from buying in the past, 2016 is shaping up to be brighter. Stabilizing real estate values mean that you’ll finally get the chance to jump in and purchase a home at a an affordable price.
An added benefit of the decrease in real estate value is that more homeowners opt to list their homes when prices stabilize. As a buyer, more listed homes means more choices and lots of opportunities to find the right home at the right price.
Larger Inventory of New Homes
Homebuilders are currently focusing on building homes in the starter to middle-range market rather than the high-end. As such, buyers have a large new home inventory to look at that offer a wide range of options. Large inventories also reduce bidding wars and, even better, often result in lower overall housing prices.
Easy to Understand Mortgage Terms
Let’s face it, the paperwork involved in purchasing a house is a bit confusing. If the thought of all of the paperwork makes you shiver, take heart. A new directive that became a part of the federal government’s Truth in Lending Act on Oct. 3, 2015, called the Real Estate Settlement Procedures Act, makes it a lot easier. Several forms have been combined into two, the language used is more understandable, and the cost breakdowns are spelled out in detail. The best part, particularly for first-time homebuyers, is that a closing disclosure will be provided at least three business days before the closing date, rather than right at the close or only a few hours before. The new law gives buyers enough time to compare costs, evaluate final terms, and raise questions beforehand. This means no more surprises at the closing table.
Rents Keep Rising
The supply of available rental units is at a near 20-year low. Rental demand is high. According to the U.S. Census Bureau, vacancy rates in the second quarter of 2015 were at a low 6.8 percent, a percentage that has not been seen since 1985. Because there are fewer vacancies, property managers have the upper hand. Rent continues to rise and managers have no need to negotiate, reduce rates, or offer concessions. In many cases, it’s less expensive to buy a home than to rent one.
Many factors are coming together in 2016 to make it a great year to purchase a home. Low interest rates, stabilized home prices, more available homes from which to choose, understandable mortgage forms, and overpriced rentals mean that 2016 could be a great year for you to finally take the plunge and buy a new home.