1. Prices Will Continue to Rise
CoreLogic’s latest Home Price Index reports that home prices have appreciated by 7.2% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.7% over the next year. The Baton Rouge market will also continue to experience the same rate of increase.
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
2. Mortgage Interest Rates Are Projected to Increase
Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained around 4%. Most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison, projecting that rates will increase by this time next year.
An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.
3. Either Way You are Paying a Mortgage
There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.
As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.
Are you ready to put your housing cost to work for you?
4. It’s Time to Move On with Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.
But what if they weren’t? Would you wait?
Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.
Buying real estate is a process, starting with a property search and ending with a closing, with many details in between. One of the most important elements in the buying process is your closing costs. Knowing how much your closing costs is key to avoiding unexpected costs that may stop the buying process altogether.
Closing costs can be as much as 2% to 3% of your new home’s total cost. This amount can be quite a bit of extra money to come to the table with at closing. So its important that your realtor knows how to ask the seller to contribute to your closing costs. Negotiating closing costs is a crucial part of the buying process. If the seller is willing, he can absorb all of the closing costs or, at the very least, share them.
Another way to cut back on closing costs for is to apply for a no point loan or a no fee loan. If a home buyer doesn’t have a lot of extra cash to bring to closing, a no point or a no fee loan can be a good way of reducing up front costs.
Contact us today to learn more buying Baton Rouge real estate, the contract process and what to expect at closing. An experienced Baton Rouge Realtor can help you be prepared to buy your new home.
Your tax refund could be used toward the purchase of a new home. A lump sum of cash can definitely help first time homebuyers make the unaffordable, affordable. A tax refund can help you either save for that new home or reduce your mortgage balance. Its always good to consider how you should use your tax refund in a wise way.
Unfortunately many are not saving for that new home or a reduction in their mortgage. According a recent survey ,by Go Banking Rates , only 5 % surveyed plan to buy a new home. Buying a home is a wise, long-term investment and using your tax refund is great way to get that needed down payment to start the process.
With the minimum down payment for a home at about 6% its a great strategy to go ahead and use your tax return toward a down payment. Own a home already how about helping your kids buy their first home ? At any rate tax returns always help with the possibility of home ownership.
Contact Glenda Daughety and Team today for more information on homes in Baton Rouge. We welcome the opportunity to update you on current market conditions, fill you in on home trends in the area, and help you with all of your buying and selling needs. Let our knowledge and experience serve as your guide to Baton Rouge real estate.
New U.S. single-family home sales surged to an eight-month high in March, pointing to underlying strength in the economy despite an apparent sharp slowdown in growth in the first quarter.
The Baton Rouge market remains strong. The average days on market is at an all time low, while prices continue to edge their way up as inventory shrinks. ” Its really a sellers market that wont quit”, this according to Glenda Daughety at Remax First here in Baton Rouge, ” We came into the spring market with low inventory and not much has changed. ” As a result its expected that the summer home sales will be strong in our market.
On a national level the Commerce Department reported on Tuesday new home sales jumped 5.8 percent to a seasonally adjusted annual rate of 621,00 units last month, the highest level since July 2016.
According to the latest report from the US Census Bureau, more Americans chose purchasing a home over signing a lease to rent in the first quarter of 2017. This marks the first time since 2006 that the number of new homeowner households outpaced the number of new renter households.
In the Baton Rouge area we are seeing a boom in new home owners as well. We continue to struggle with a housing shortage due to last years flooding. This shortage and renters choosing to buy has created a sellers market pushing home prices to a record level.
That means that the homeownership rate amongst new households was 70% !
This is huge news as the national homeownership rate is currently 63.6% and has only ever come close to this figure in the second quarter of 2004 when the homeownership rate reached an all-time high of 69.2%. This national figure also holds true for the Baton Rouge real estate market.
A recent Wall Street Journal article pointed to the uptick in first-time homebuyers coming to market as a reason for the jump:
“The return of first-time buyers is accelerating. In all they have accounted for 42% of buyers this year, up from 38% in 2015 and 31% at the lowest point during the recent housing cycle in 2011, according to Fannie Mae, which defines first-time buyers as anyone who hasn’t owned a home in the past three years.”
Ralph McLaughlin, Trulia’s Chief Economist, had this to say about what a bump in new homeowner households could mean for the housing market:
“Strong renter household formation is one of the reasons why the homeownership rate has continued to drop since the onset of the housing crisis, so any sign this trend is reversing is something to take note of. We look forward to future releases of these data to determine whether this is a statistical blip or a trend.”
Bottom Line For Baton Rouge Area
As more and more potential first-time buyers realize their ability to buy a home without having to rent first, not only will the homeownership rate benefit, but so will the overall economy. However in our local market we will continue to see prices climb for the short term.
Contact Glenda Daughety today to learn more about real estate in Baton Rouge LA. We welcome the opportunity to update you on current market conditions while recommending lenders at the same time. Let our knowledge and experience serve as your guide to Baton Rouge real estate.