Buying a house is never really an instinctive decision, and usually has months of thoughts put into it. However, Freddie Mac may not agree with you right now, not after this forecast.
What Is the Forecast?
Mortgage rates are some of the most closely monitored figures in the world, and the way they are shifting is not really an encouraging trend. It is predicted that by the last quarter of 2019, mortgage rates would go as high as 5.1% for 30-year fixed mortgage houses, which is an incredibly high price to pay in the upcoming days.
There’s more to the picture than meets the eye. The applicants for this mortgage exceed those of any other kind all over the country because the pressure of payment is gradual and never really takes an individual by storm. What this blatantly means is that next year the number of people able to afford houses will drop magnificently owning to the hesitation of paying a 5.1% mortgage rate.
Is There A Good Side to It?
The rate of growth of houses in the market annually is 7.1% today, which means that to feed the demand of a higher population, more and more places are being constructed. The price is being paid in the form of higher prices, which is compelling many individuals to shift to a rental system. Freddie Mac predicts that this will create a downward pressure on the market, leading to the drop in the growth rate to 4.3%, and eventually a decrease in the price as well.
The underlying question is how long will it take for the good news to come about?
Is it smarter to wait for the prices to fall with a greater mortgage rate or act now when you can expect your property to be valued highly? The better choice is today.
The following are some of the most expected impacts of these changes in the market:
1. Increased Competition
By no means is the number of buyers decreasing. In fact, with more and more millennials looking to get employed and establish their separate household, the houses being constructed presently are going to hold key importance. This healthy competition in the market will compel the prices to remain stable despite an increase in the supply of houses.
2. Home Sales
The sales of houses cannot be computed directly to the increase in mortgage rates, because that is simply one factor affecting the total ability of individuals to purchase. The overall purchasing power of the America community, for example, is perhaps rising on average alongside these prices. If the rate of purchase remains as steady as it is right now then the growth of houses may actually end up going above 7%.
3. Down Payments
It goes without a doubt that the upcoming troubles of the near future will result in individuals making quick decisions about purchasing houses. This may lead to an increase in the down payments demanded by homeowners because they know they’re dealing in a relatively less profitable time.
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