If ever there was a fantastic time to buy a home, it’s right now. Never mind the fact that I head a leading real estate brokerage company. Let the statistics show you why now is your best bet to get into the housing market:
1. Home values are recovering
U.S. home values rose 0.5% from February to March, the largest monthly increase since May 2006, before values at the national level peaked, according to a recent report from Zillow this month. In addition, the company said in its home value forecast that it expects 19 of the 30 markets it covers will reach a bottom in values this year. Phoenix and Miami-Ft. Lauderdale are expected to see significant home value increases.
2. Interest rates are still extraordinarily low
The cost of borrowing is still extremely attractive for buyers who qualify and are ready for the financial responsibility of a home mortgage. Saying mortgage rates have hit a new “record low” has become a bit of a broken record. At an average 4.04% in the latest Mortgage Bankers Association survey, rates on the standard 30-year fixed-rate mortgage are almost too good to be true. While there’s no sign from the Federal Reserve that rates will increase significantly anytime soon, it’s definitely a great condition for buyers right now.
3. Multiple offers are back
Demand for housing is starting to outweigh supply in some markets across the country. We covered the return of bidding wars this spring in markets like Silicon Valley, Miami, Seattle and Washington, D.C. Even despite the presence of “war” like situations, multiple offers are once again a fact of life in markets with strong economies and job prospects.
4. Rents are rising with no end in sight
The median U.S. rent was $721 per month in the first quarter, up 5.6% from the same period a year earlier, according to the Commerce Department. Altogether, rental income has increased 12% in the year ended in March. In addition to rising rent, the supply of units is the tightest in more than 10 years, with 8.8% of units vacant in the first quarter. This at a time when the demand for rental units is at the highest in 15 years. This means more buyers likely will continue to jump from that tight market into owning while the numbers make sense.
As you can see, the buyer market is about to get more crowded than it’s been the last few years. These are each solid market forces that could push more and more buyers off the fence, creating more transactions and helping to lift home values this year and next. If you think you want to buy – or know buyers who are testing the waters – now is your chance to take advantage of prime home-buying conditions.