Business & Merchant
- Last Updated on Tuesday, 01 December 2015 14:57
By Roger Dolanch Broker/Owner
As the October employment report showed, the demand for housing is only going to grow. It makes sense that when people have jobs they can break off and form new households, buy a bigger or better home, leave roommates behind, or even move out of mom and dad’s basement!
Most of the newly formed households created over the past two years were renting households, but based on U.S. census data for the third quarter of this year, it appears that homeownership has started to recover.
This makes a lot of sense now that it is more often than not cheaper to own than to rent. And it’s not getting better for tenants. Rents are rising year over year at twice the pace of listing prices. Meanwhile, mortgage rates remain at near record lows but appear poised to increase over the next year. And home prices locally are rising, too!
So if you are financially able to purchase and you intend to live in a home long enough to cover transaction costs, you will be better off financially if you buy as soon as you can. After all, if you are tired of your current living arrangement, you probably won’t feel better about it in the next six months.
The top factors driving home shoppers this past summer were pent-up demand and recognition of favorable mortgage rates and home prices. These factors are predicted to remain well into the next year.
Demand for housing is seasonal. Many people are mistakenly conditioned to believe that we should buy homes in the spring, summer and early fall. So come each October, plans to purchase (or even list a home for sale) shift to the spring. While the school calendar and weather do influence the ideal time to move, many buyers would benefit from buying in winter rather than waiting until next spring.
In October, the percentage of would-be buyers on realtor.com saying that they intend to buy in seven to 12 months was the highest it has been all year and represented the largest time frame for purchase. Likewise, October produced the lowest percentage of would-be buyers, saying they intend to buy in the next three months.
In other words, people’s stated plans point to a very strong spring for home sales. Great, right? But here’s the problem: Inventory isn’t likely to be higher in March and April than it is right now because of that. And while one would expect inventory to grow in spring and into summer, it won’t grow as fast as the seasonal demand.
If you are ready, consider getting in the market now instead of waiting for spring. You will have much less competition now than later while taking full advantage of today’s record breaking low interest rates!
So if you are considering buying a home next spring, it’s worth exploring the inventory now and reaching out to one of your CENTURY 21 Frontier Realty professionals. A new home could be the best gift you give yourself and your family this holiday season.
