When Is The Best Time To Buy Your Home?
The best time to buy a new home is right now and Gerstad Builders wants to help.
Whether you’re an empty nester with kids out of the house or a new millennial looking to buy your first house, the opportunity to own your next home, or first home, has never been better. Historically speaking, mortgage rates have followed a trend throughout the years, moving lower and lower since a spike in 1980. Rates crossed the 10% threshold in 1990, the 5% threshold in 2008, and have been hovering around 3-4% ever since. Mortgage rates have NEVER been lower than in the past 6-7 years and you do not want to miss this window.
We have already experienced two increases in interest rates since 2018, signaling that we may be moving toward an upward trend, and mortgage rates not remaining this low for much longer. Generally forecasting what we think the trend may be leading toward, we sometimes see a trend of one or a few small spikes before a much larger interest rate spike occurs. However, these metrics can be unpredictable and nobody is ever certain of what may happen past the immediate future. The FED is forecasting additional interest rate hikes, but they can be avoided if you are ready to start the home buying process now.
Housing prices are another huge factor could delay a purchasing decision. When people believe that housing prices are constantly increasing, they may stay on the fence and not enter the market. The perception sometimes is that the cost of a house has increased. That perception is largely due to inflation. If you take a look at the graph below, you can see that once you take inflation into account, housing prices have bottomed out and are now trending upward. We can see and expect this to continue rising, which is why trying to get back ahead of the inflation rate curve is important.
As the housing market continues to recover from the 2008 recession, prices of homes will continue to increase based on a variety of influences. Factors influencing the housing prices include labor force wages (which are increasing), material prices (affected by tariffs), and demand from the housing market (which is increasing). Monitoring these key factors, as well as any other industry factors, will help you determine the best time to buy a house.
With interest rates on the rise, the housing index also trending that way as well, and all of the other factors discussed here, we know that now is a great time to take advantage of the market situation and purchase a home. If you have been on the fence or considering a new home, the time has come to buy.
If you are interested in learning more about Gerstad Builders’ many communities, click here to contact us or call at (815) 385-4495. We would be happy to help you find your forever home.