After an inarguably tumultuous 2016, many would-be first time home buyers might be thinking of sitting tight and waiting out the coming year in their rental before making the ultimate commitment toward a home purchase. But that could prove a costly mistake.
In fact, whether you are here in the Gainesville area, or elsewhere in the U.S., all market indicators point toward the conclusion that acting now is the best advice for new, educated home buyers in 2017.
The US Consumer Conference Board said last week that its consumer confidence index climbed to 113.7 in December, up from 109.4 in November and the highest since it reached 114 in August 2001. With the growth of the U.S. economy at a 3.5 percent annual pace from July to September, and current unemployment at a nine-year low of 4.6 percent, 2017 may be the year to take the plunge into the first home buyer’s market.
Even after the Federal Reserve raised interest rates by a quarter of a percent in December, new home buyers should keep in mind, that that’s only the second rise in a decade. Lending rates are still extremely low historically but that may not be the case for long.
According to the National Association of Realtors (NAR) 2017 housing forecast, by the end of the year, mortgage rates could be 4.6%, with the Federal Reserve expected to raise rates a few more times to 1.25%. Additionally, according the NAR Chief Economist Lawrence Yun, 2018 rates may soar even higher to 5.5%.
So, with 52% of 2017 home sales expected to be to first-time home buyers (according to the NAR), how should you proceed?
Start now, ask questions.
You should know your credit score and have worked toward making yourself as desirable as possible to credit lenders. Again, mortgage rates are still in a reasonable range, but you want to put yourself in the best position possible going forward. If you haven’t already done so, make calls now to area lenders to more fully understand the mortgage application process, loan options and all the associated costs of home purchasing.
Make a plan and stick with it.
Now more than ever, you need to be truly honest with yourself as to what is a home purchase need vs. a home purchase want. If you’ve never owned a home before, remember buying a home is different than owning and maintaining a home. Be realistic, set a budget and don’t be tempted to stray.
Know the neighborhoods.
Housing prices are expected to increase roughly 4% in 2017 and inventory on new homes is not expected to meet the increasing market demands, so your ability to act quickly and confidently when you see what you want in your price range is crucial. Get to know the area where you are looking to purchase. Are there good schools close by? That may not be a need now for you but down the road it may, and for future resale success, it’s essential. How would your daily commute be? Are the neighbors in your desired area taking care of and investing in their homes? That too will affect the value of your home going forward. Educate yourself going in and you’ll be able to react that much more confidently when the right home purchase comes along.
Don’t do it alone!
Finally, protect yourself and your interests by working with an expert in your local housing market. In Gainesville, and the surrounding Alachua county area, Coldwell Banker M.M. Parrish Realtors have over 80 realtor professionals to help guide you through your first home buying experience. Click here to find the best realtor for your needs.
With over 100 years of home buying experience right here in Gainesville, Coldwell Banker M.M. Parrish sales agents will work with you every step of the way to make your first home buying experience as rewarding as possible. Here’s to homeownership and here’s to 2017!