2017, a year with one of the strongest real estate markets in a decade, is quickly coming to a close. As the market naturally settles and leaves continue to fall, this winter has become the ideal time for Americans to buy a home. Here are the top reasons why buying a home should be on your radar before the new year.
1. Mortgage Rates Are Rising
Mortgage rates have been steadily climbing since the Federal Reserve recently raised its key interest rate. As of 2017, the average rate is above 4%, and experts say rates could easily be at 6% by 2019. Since your monthly mortgage payment is determined by both your home’s sale price and your interest rate, it’s important that you buy at a time where interest rates are low. The limited demand for mortgages around the holidays causes a trend of temporary lower interest rates during the cooler months, making this winter an ideal time to buy. If you put off buying a home longer, you run the risk of mortgage payments continuing to increase significantly.
2. There Is Less Competition
Many families buy in the summer to get settled in their new home by the beginning of the school year, which means a huge portion of the buyer pool is out of the market during the winter months. The smaller buyer pool means less competition for buyers and fewer offers for sellers, giving buyers the upper hand in negotiations. As the weather cools off, the urgency to make an offer immediately after showing a home also cools off, making it an ideal time to be a buyer.
3. Inventory Is Shrinking
Since the inventory peak in 2008, real estate inventory has steadily declined every year. From 2015 to 2016, the United States saw a 10% decrease in homes placed on the market, and experts predict this shrinkage will indefinitely continue every year. Whether you plan to buy in spring or are ready to buy now, the selection of inventory continues to shrink, so winter is the perfect time to get a head start on finding your dream home!
4. Sellers Are Motivated
Many of the homes on the market by the end of the year are homes that went up on the market in the spring and summer, making sellers more motivated than ever to sell their home. Additionally, the potential for tax advantages incentivizes homeowners to make their sale before December 31. Real estate experts know that the slower market in the winter influences sellers to be more flexible in negotiations, which makes it likely you’ll come out on top in debates over closing terms like sales price and closing costs.
5. Home Prices Are Rising
House prices have risen every year since 2008 and will continue to do so in 2018. Experts say rising mortgage rates and the new administration have put the real estate market on unpredictable ground. However, studies show that home buyers can find their dream homes for less in the winter months as compared to summer months, as median house prices during the winter are significantly lower than those in summer. As homes continue to trend to be more expensive, take advantage of the ideal market this winter to find exactly what you’re looking for!
6. See A Home’s True Colors
Sure, any homeowner can make a home seem perfect in the sunshine of summer, but what about when the weather is at its harshest? House-hunting in the winter months means you are able to see how features like landscaping, plumbing, heating and roofs perform in the winter climate. Your property inspection will be a more accurate reflection of your home’s value when it is done in the rain and snow. Finding a home that can hold up all year round will ensure you’re buying your dream home.
7. Save Time
Many buyers spend hours upon hours searching through hundreds of homes during peak inventory months, only to usually be caught in a bidding war due to the high competition to buy. During the winter, a smaller selection of homes and smaller buyer pool saves buyers both time and energy. With sellers more motivated during the winter, this urgency will likely lead to a smoother and faster closing process as well.
When looking at the current market and where it is projected to be in 2018, real estate experts say “you should be buying urgently as soon as possible”. The current market conditions present significant and compelling advantages for buying a home in the winter of 2017, which we recommend buyers take full advantage of before 2018 is here! Grab your coats and brave the cold this winter to house-hunt for the home of your dreams!
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