What to expect if you’re buying a house this Spring

DSC03046This March, 2016, article by Housingwire’s Brena Swanson gives good advise.

While spring home buying started early this year, as famous Punxsutawney Phil confirmed without a shadow of a doubt at the beginning of February, this doesn’t mean you’re quite ready to add the title of homeowner to your name. It’s likely to be the biggest financial decision you will ever make, and one that does not need to be decided on the premise that everyone else is doing it.

To help in your deliberation, HousingWire talked to Ralph McLaughlin, chief economist with Trulia, to compile a list of five factors that define this year’s housing market.

  1. Selling your home will be easier, but buying your next one may be more difficult.

McLaughlin explained that inventory of all homes for sale is down over 35% over the last four years.

“We are in a time of short supply, which is great news for sellers because they will likely be faced with multiple offers due to the little inventory out there,” he said.

But on the flipside, he noted that it’s not so great for people looking to buy a home. “They will be up against a lot of other people and against a short supply of existing homes,” McLaughlin said.

Interestingly enough, he said that the inventory of starter homes, or the homes that are in the least expensive, are probably at the lowest supply they have been in four years.

The February S&P/Case-Shiller report echoed similar inventory concerns, with Zillow Chief Economist Svenja Gudell commenting on it saying, “There are a lot of economic forces at work behind the scenes that will have a big impact on housing as we enter the busy home-shopping season. Low inventory is a factor in almost every market, so buyers should be prepared for a limited selection in the months to come.”

  1. It’s finding a home that’s tough to come by.

McLaughlin advised that shoppers should consider buying a new home or a new home off a plan.

Rather than deal with bidding wars, he said you should turn to new inventory, specifically homes off a plan.

In the most recent new home sales report, McLaughlin explained that the share of new home sales not started, in other words homes purchased off a plan, hovered near a 10-year high.

“Why? The inventory of existing homes continues to fall. Low existing inventory likely pushes prospective buyers away from existing homes towards new homes, and as new home sales rise, this allows builders to sell more new homes off plan,” McLaughlin said.

  1. It’s still cheaper to buy than rent.

Even though inventory is down and buying a home is more difficult and stressful, in most parts of the country, it is still cheaper to buy a home than rent over a 5-year period. And it gets cheaper after that, McLaughlin explained.

Most notably, it’s especially true for younger homebuyers that put less than 10% down. He cautioned buyers to remain patient because over a 5-year period it will be in your financial best interest.

  1. Don’t panic over possible interest rate increases.

“A lot of people ask me this. Should I be concerned? Will it make a difference? The short answer is no,” he said.

As it stands, he said that interest rates are nothing to worry about because what the Fed does is only loosely tied to mortgage rates.

Even if mortgage rates do go up, which they will do in the medium to long run, in places like California and Honolulu, rates would have rise to 4.5% to 5% to roughly equate the cost of renting.

And in the rest of the country, McLaughlin said, “Rates would have to reach 6% to 7%, and we are a long way off from interest rates at that level. Keep an eye on it but don’t fret.”

This article was edited for the Tulsa market. To see the entire article, go here.

If you are thinking about buying or selling a home, give me a call at 918-809-5199 for a free consultation.

Advertisements

About bertwilliamshomes

Bert Williams has been a Tulsa/Broken Arrow resident since 1989 and was in the broadcast television equipment brokerage business for 14 years and in advertising and marketing for over 30 years. Bert joined the rapidly growing Chinowth and Cohen Real Estate team in 2005 when there were only 45 associates. Now with over 350 associates and eight offices across the Tulsa/Broken Arrow/Owasso/Bixby/Sand Springs/Bartlesville/Grand Lake areas, Bert has the support and resources through the C&C team to find the perfect home for you and at the same time find the perfect family to purchase the home you own now. In 2013, Bert became a full time Real Estate agent working from the Broken Arrow office. His experience with negotiations and with the Real Estate market dating back to 2005 give you a great advantage when you decide to buy or sell a home. Call me at 918-809-5199. I look forward to meeting you!
This entry was posted in Buying a Home, Selling a Home and tagged , , , , , , . Bookmark the permalink.

One Response to What to expect if you’re buying a house this Spring

  1. Pingback: What to expect if you’re buying a house this Spring | US Title Davis County

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s