The housing market in America has not exactly seen a stable period in quite a while, but if there was any it is about to be blown away.
That is right; you can gear up for a year full of high mortgage rates and mounted home prices which may become exclusively available for a certain category of people in the country. What this means is that 2018 should be the year where you finalize your home dealing or you might have to pay a heavy price or worse, leave your project hanging.
What’s the Rise in Mortgage Rates About?
According to a recent survey report released by CoreLogic, it is expected that in March of 2019 the average mortgage rate will go up by 9.7%, which means that the average mortgage payment for the year can go as high as $950 from the $859 it is this year.
This increase is not a result of a recent government policy or something which was unexpected; the housing market has been preparing for such shocks for a while. The inflation rate in the country is expected to slightly rise next year, and as a result, the impact will be on the prices of houses which will also increase. However, the existing uncertainty in the global economy may appreciate/depreciate the currency beyond expectation, but that does not mean the market prices will fall proportionately.
What About Incomes?
The prices of homes are expected to go up by 3.9% next year, but the average increase in income of 3% is not as much, creating an incoherent situation for buyers. In a realistic scenario, it cannot be argued that the difference in these two values is not great because the overlying impact of the inflation on the currency will fall on all sectors.
Every year America is met with the need to increase job opportunities for people who enter the market, and it will become a challenge to do so with an overall rise in the incomes.
Position of Homebuilders
The common people have always held a habit of assuming that the homebuilders are the ones who keep the prices unrealistically high for the services they commit to, but this time around they may actually be the savior people are looking for.
The pace of house completion is expected to go up by 11% next year, whereas the pace at which construction of houses begins is expected to rise by a full 20% in comparison to the figures of 2017. This increase in the pace of housing construction means that the supply of houses in the market will increase, and with the sudden surge in demand due to the expected rise in mortgage rates, the overall lowered pressure on price can be beneficial in the short run.
What Should You Do?
As of now, all pointers give a singular direction to the matter at hand; you need to purchase that targeted house before it gets too late. Even if you have money to afford the surges, you might as well save as much as you can!