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by Robert DeFalco
on Tuesday, January 31st, 2017 at 7:09pm.
With the recent changes in mortgage rates and the economy, and the further changes predicted by experts for 2017, now is the time to get serious about buying a home!
Buying a house in 2017 will feel kind of like you’ve jumped onto the subway just as the doors were closing. Your heart’s pounding and you’re winded from the race, but you made it—just in time.
If that's an exaggeration, it's not by much. Realtor.com reports that if you wait to see whether the market stabilizes, you may be gambling with your future.
And that’s not a smart gamble, our real estate experts say.
While still historically low, mortgage rates have risen sharply since August of last year, and experts predict that trend will continue.
Before you freak out, take heart: Rising rates aren’t necessarily a deal breaker for buyers. The National Association of Realtors® calculated that a rise from 4.2% to 5% would increase average monthly mortgage payments by $90—not nothing, but not a catastrophe, either.
On the bright side, as mortgage rates go up, home prices generally come down to compensate.
There's been an almost 10 percent drop in available homes since November, 2016.
Real estate experts predict that inventory will continue to shrink, at least for the foreseeable future. That means that in most areas of the country, buyers have more homes to choose from today than they will next year.
If inventory continues to drop, competition for available homes will be even more intense come warmer weather and the traditional buying season.
While experts believe home prices will begin to drop in response to the still-rising mortgage rates, for the moment their upward momentum continues.
The bad news for buyers is that home prices now stand higher than before the 2007 crash, increasing 5% from 2015 to 2016. And housing experts expect an additional 2% to 3% jump in 2017, DeNapoli says.
Again, that will depend on how the markets respond to the mortgage rates, and continuing economic changes sparked by the Trump administration.
In the meantime, your odds might be best to start that home search now.