Price appreciation in the Austin market continues to be unprecedented and is expected to continue to grow. Right now, as it stands it is a RED-HOT market with the median home price up almost 20 percent since last year and now at $370,000 – that’s $40,000 above the national average. So you may be asking yourself, should I buy a house right now?
We believe the answer is YES! With access to credit and record level low mortgage rates, it’s also a good time to buy. But with fierce competition for homes, you need to be prepared for a seller’s market. Although we have focused on the Austin metro area, homes across our MLS-covered service areas are experiencing the same thing.
As a home buyer, this means you need some flexibility, a strong offer and prequalification for a loan. With home prices expected to increase this year and mortgage rates still low, it’s a good time to dip into the homebuying market. Here are some things to consider before you take that plunge.
Supply and Demand
There are more home buyers in the market right now than there are homes for sale. That means you will be competing for homes. You may not get your “dream home” but figure out your most important wants and needs so you don’t compromise on something that you’ll regret. If you’re an investor, now is a good time to scoop up a property if you have the cash and desire.
Low Mortgage Rates
Mortgage rates are still at historic lows so you may qualify for more than you would have a few years ago. Economists do expect the rates to remain low this year with the 30-year fixed-rate mortgage projected to average 3.15%. If you put mortgage interest rates in context through the years, consider this – in 1971, the 30-year fixed-rate mortgage hovered between 7.29% and 7.73%, in 1981 it rose to an all-time high of 18.63%, in 1991 it averaged 9.25% and by 2001 it averaged 6.97%. Interest rates staying under 4% is great news for homebuyers even as home prices continue to rise.
Research Before Getting Started
House hunting right now takes a little work but being prepared will definitely give you a leg up. Research different locations so you know the commute times, schools, shopping and area amenities available. Make sure you are aware of the additional costs that come with not only buying a home but maintaining it. You’ll have a down payment, closing costs, utility costs, property taxes, insurance, possible HOA fees, yearly maintenance and more.
Starting your home search before getting pre-approved for a mortgage is a common home buyer mistake. It’s important to get your finances in order and shop for a lender as you would a home. Once you have a lender, be prepared to give them details on your finances including your income, debt, employment and accounts. A lender will offer you a loan for a certain amount with specific terms. Although not a final guarantee of full approval, it will give you a leg up during the offer process.
Ready to get started? Contact us today!