Is this a good time to buy a home?
It’s a question with no correct answer. Dallas-Fort Worth home prices have risen 9.5 percent year-over-year in the fourth quarter of 2015 as demand continues to surge, according to the Texas Quarterly Housing Report. There is no doubt that the last four years have been one of the most successful booms in the history of real estate in Texas.
Fueling the rise in prices has been a low inventory of homes on the market. Currently, there is about a 1.9 months average of inventory of homes for sale across the DFW metroplex.
Despite higher home prices, today’s mortgage rates have remained low, which has helped to keep homes affordable for homebuyers in the market. But will mortgage rates remain low through the rest of 2016 and into 2017? Many economists believe rates have seen the bottom, and it’s a higher probability that rates will not remain in the 3’s.
Every 50 basis point (0.50%) increase in mortgage rates lowers your maximum home purchase price by 5 percent. So, homebuyers you have a choice.
Should you wait out the market and the election for another 12 months and hope you’re in a better position to purchase a home next year? Or, do you buy a home now, even though it may not be ideal circumstances?
That may be a difficult question to answer. What is for certain is change, and by this time next year buying a home is more likely than not to be a more expensive proposition.
Want to discuss your options?