6 Reasons to Buy Your First Home This Spring
Why You Don’t Want to Put off Buying Your First Home This Spring
Spring is traditionally the start of the homebuying season. This is the time when sellers and buyers once again become lively after the lackluster markets of fall and winter. But, if you’re a first-time homebuyer, making your decision to buy this spring is taking on even greater importance.
Change is brewing in the market, and not all the changes are looking to be beneficial to buyers. So, here are six reasons why you might want to buy your first home this spring, without further delay – not even until the summer!
#1: Interest Rates Are Rising
At the start of January 2018, mortgage rates had remained below 4% for 26 consecutive weeks. But by the end of the month, the nationwide average 30-year rate jumped to 4.15%. This number didn’t even factor in the entire upswing. In fact, it was the fastest rate jump since the 2016 election.
Many real estate experts, such as those at the Mortgage Bankers Association, Realtor.com, National Association of Realtors, and others have predicted interest rates to climb as high as 5% by the end of 2018, but all were surprised that the rate jumped as high as it did, and as quickly as it did.
Still, despite the rise in interest rates, the current rates are near half their historical average, so there is more time to get a decent rate on a mortgage. The question is – who knows how long that will last?
#2: Home Prices Are Rising
Home prices have been rising for several months now, and that trend is expected to continue beyond spring 2018. Perhaps more importantly, the higher the prices climb, the more money you will have to put down on your home.
After all, 20% on a $250,000 home is going to be less than 20% on a $258,000 home. If you wait to buy later in the year, you could wind up paying several thousands more in your down payment than if had you bought the same home at a lower price in spring.
#3: Homes Are in Tight Supply
Like the budding flowers making their way out of the ground, homes for sale tend to be in large supply in spring. But in 2018, the number of homes available is expected to remain low.
As a result, this means the homes that are on the market will sell quickly and buyer competition will be fierce. Spring of 2018 is going to be a great time to be a seller, but first-time buyers will face obstacles, so expect to face bidding wars for hot properties.
#4: More Loan Options for Buyers With Less-Than-Perfect Credit
A lot of Americans are still reeling from the recession, and lenders understand that bouncing back from that or some other life-altering event takes time. Therefore, many lenders have started offering non-traditional mortgage packages to help borrowers with less-than-perfect credit get approved.
These types of loans are called “non-QM” loans because they don’t meet the standard qualification rules as set by Fannie Mae and Freddie Mac.
#5: The Tax Bill Offers a Short-Term Benefit for Buying in Spring
With the passage of the new tax bill, the average working American will enjoy about $2,000 extra in their pockets in 2018. But, that benefit is only expected to be temporary.
Further declines in the nation’s unemployment are expected to cause inflationary pressure on the Federal Reserve. So, if you are planning on buying a home in 2018, buying it in the spring will help you secure your rate before inflation kicks in.
#6: Buy Early and Enjoy More Equity
By purchasing your first home in spring, you will be more likely to pay closer to the home’s true market value. This means that as the year progresses, and home values and prices continue to climb, you’ll be gaining additional equity in your home as a result.
This year’s housing market has already undergone some changes that many experts didn’t see coming. The only thing you can really expect out of the 2018 housing market is that, as usual, it will likely be unpredictable. Ultimately, buying in the spring will help you avoid any potential negative changes that may come into play later in the year.