With the presidential election around the corner, some homebuyers are getting nervous and wondering if they should wait until after everything settles this fall. “I’ve noticed a few surveys asking homebuyers if they are waiting, but everything I’ve seen indicates that our economy is strong and this is still a great time for buying in the U.S.,” says real estate agent Paige Byam Soliday. In fact, now might just be the best time to buy a house. Here are six reasons why:
1. Mortgage Rates Are Still Low
Mortgage rates are starting to rise very slowly, according to the most recent Freddie Mac Primary Mortgage Market Survey (PMMS). But at 3.90 percent (at the start of June 2016), they are still very low — close to a historical low, in fact. Lower mortgage interest rates mean more opportunity for buyers. However, Freddie Mac forecasts that rates will rise to 4.5 percent by 2017. The best time to buy a house is when the rates are low, so you may want to take advantage of the current rates.
2. Rent Is High
“Rents are super high right now, and only increasing,” says Soliday, who is based in Cincinnati. Rental rates are increasing even in markets like Cincinnati that have traditionally had a lower cost of living. With people waiting longer to get married and coming out of college with more student debt, renting can feel like the safer option. But as rent increases, buying starts to make more and more economic sense.
3. Unemployment Is Down
According to the latest report from the Bureau of Labor Statistics, unemployment rates continue to stay low, remaining at 4.9 percent in August 2016 for the third straight month. More jobs mean more confidence and a stronger housing market in general.
4. Housing Prices Are Expected to Continue Rising
“Housing prices are definitely rising. It’s not extreme, like when real estate was overpriced, but it’s definitely gaining value,” says Soliday. In one way, it’s very much a seller’s market. “I’m seeing a lot of multiple offers on properties. Things are selling in less than a day,” she says. “That doesn’t mean it isn’t a good time to buy. It’s a great time to buy because people want to sell. It’s never just one or the other.” The bottom line is that if you’re waiting for housing prices to fall, they likely won’t. Now is a good time to buy, especially in hot markets.
5. Closing Terms Are Clearer
With the Know Before You Owe mortgage disclosure rule, terms should be clearer for buyers at the closing of a sale. The rule includes two new, clearer forms that replace four more cumbersome older forms. You also get three business days to review your closing disclosure and ask questions before you close on a mortgage. “The clearer terms have made it a lot easier for buyers,” says Soliday.
6. Lenders Are Eager
Lenders want to lend to buyers who are ready, and as the market picks up, that will only continue. One caveat is that you may need to get preapproved before you think seriously about buying. “It used to be good advice to get preapproved with a lender, not just prequalified. Now it’s a necessity,” says Soliday. “If I could only recommend one thing, it would be that.”
Navigating a market on the rise can be both exciting and challenging. “It might be harder to find a home in the neighborhood you want if it’s hot, but it still beats renting and rates are low,” Soliday says. No matter what the election brings, these six reasons suggest that the best time to buy a house may very well be right now.