The real estate market is strong in many parts of the country, and metro areas are doing exceptionally well. While the market’s improvement began several years ago, the trend continues with an increase of new home purchases and higher property values. It’s a good time to buy, and there are several indications to reassure potential home buyers looking to purchase a new home.
One of the main concerns that prospective buyers have is that the value of a home they buy might tumble after the purchase. However, the reality is that home prices continue to increase. Real estate economists have forecast house prices to increase 4.3 percent in 2019, and 3.6 percent in 2020. These increases are normal considering most homes lost more than 30 percent of their value over the past 10 years. There are several reasons to support the continuation of increasing home prices including the growth of the economy and a robust job market.
Other reasons why house prices continue to rise is a shortage of homes that are affordable, according to real estate market analysts. This shortage is increasing the price of houses because there is more demand for lower priced properties. This will continue for the coming years with less and less for-sale signs in front of homes in affordable neighborhoods. But affordable homes are not the only houses that are in short supply, because the total inventory of houses remains squeezed. The Northeast and Midwest are two regions that have been doing particularly well with new homes for sale madison wi being some of the most sought-after properties.
Another reassuring point for potential home buyers is that inflation-adjusted prices are well below their all-time highs. In fact, the prices of houses now are cheaper than what they were in 2004. One may argue that those all-time highs did not reflect the true cost of properties at the time, but the fact remains that prices are cheaper than previously listed. Considering the trend of prices increasing is predicted to continue, it is safe to expect that prices will eventually top their peak prices that were seen a decade earlier.
Also, mortgage rates remain low, and while not as low as they were several years ago, they remain attractive to home buyers. The Federal Reserve continues to raise interest rates which results in mortgage rates following suit. Many experts agree the market is in an environment of increasing interest rates and will be this way for years to come.
People who have secured fixed-rate mortgages are certainly feeling good about their decision to purchase a new home, but the opportunity is still available, and securing a fixed-rate mortgage this year will be more favorable than securing one a year or two from now. All indications are that new home prices will continue to rise, and many affordable houses will continue to disappear from the market. These two factors in addition to lower mortgage rates make it an ideal time to purchase a new home.