If you’ve been thinking about buying a new home this could be the year to do it. Mortgages have been showing signs of rising and there have been a lot of warnings that they will continue to rise. But even though they’re likely to start going up, you haven’t missed your chance to get a deal on a house.
If you’ve been looking at Zillow you have seen the constant rise in home prices. Even though prices are still rising they are expected to slow their pace soon. Prices are expected to rise 3.5%, according to Zillow’s Chief Economist Svenja Gudell.
As the rise in prices slows, those who have been waiting are likely to jump into the buying market. But it looks like not everyone will be able to take advantage. According to Zillow home values are expected to outpace wage growth, which can make it tough to afford a home, especially for lower-income buyers.
If you know human nature you can also assume that as the home price rise slows down it will prompt more owners to list their homes before there is a downturn. The new home market is also expected to grow in the coming year with builders focusing more on starter and middle-range homes, which will also boost inventory and make it easier for buyers.
With more homes on the market, bidding wars will become less common and prices could ease even more. Also rental prices are expected to rise which means in most cities, buying will be cheaper than renting.
Even though mortgages could get more expensive, buying might still be the better deal. Interest rates would need to rise to around 6.5% for the cost of buying to equal that of renting on a national level, according to Ralph McLaughlin, housing economist at Trulia.
Over all, buying a home is expected to be the best deal in town this year.