An Honest Look at the Housing Market: Is Now a Good Time to Buy a Home?
There is a lot of white noise out there about whether or not now is a good time to buy. Some say yes, some say no – everyone seems confused. While we cannot predict the future at Neighborhood Escrow, we can say that there are certain signs indicating that now may indeed be a good time to buy. Keep reading to learn more about them.
Contract Activity is Up
A look at the latest data makes one thing clear: Contract activity is up. In fact, it’s up more than 1.5% year over year. 30-year fixed mortgages are at 3.64% as of the writing of this blog, which is considerably less than the 4.72% we saw in September of 2018. All four regions of the United States saw home sales go up – the west was the highest of all with an 8% increase year over year.
With a Lack of New Supply We Can Expect Home Prices to Continue to Rise
With such low-interest rates, buyers are responding. The sales slump we experienced in the west seems to be over and as demand goes up, so will appreciation on home prices. This is due in part to the fact that most areas in Southern California have already been developed. With a lack of an ability to grow out or up, the only thing to rise is costs.
The Reason for the Slow Movement
Some may counter: Interest rates have been low for quite some time – why would they just now start affecting the rate of home buying? Because while interest rates can help increase a buyer’s interest in buying a home and encourage them to start taking action, the real obstacle for most buyers is that they then still need to come up with a down payment.
Construction is Down but Sales of New Homes Are Up
Construction of new homes has gone by around 2% year-over-year, yet the sale of new construction homes is up nearly 18%. This is due to the slow responses of developers – when sales were down they stopped building. Now that sales are back up, you may expect to see these numbers flip again. It is an ongoing issue in many parts not just of California but throughout the country.
It is an Exciting Time to Buy a Home
What is the conclusion of all this information? It is an exciting time to buy a home! The stars have not aligned perfectly but as the experts expect prices to go up in the near future, it may be a great time to invest in property. At Neighborhood Escrow we will be busy helping our clients close on the homes of their dreams.
