As we come off one of the best years in the real estate market in 2015, we have experienced nothing but improved year over year health. There are many signs that 2016 should prove to be just as good as 2015, and perhaps even better.
This spring, money is still cheap to borrow despite any slight increases in rates and rents show no sign of weakening. In fact, more than 85% of the U.S. have rents that exceed 30% of the income of renting households. Because of this, it is more affordable to buy in more than three-quarters of the U.S. Until rents stabilize or more inventory is made available at lower rates, buying will be a more attractive option.
Most experts are stating that they don’t anticipate rates to climb much over 4% in the next year. “I don’t think [mortgage rates] are going up,” says Ed Yardeni, president and chief investment strategist at Yardeni Research. “Mortgage rates are really tied more to the bond market than the Fed funds rate.” In a recent report conducted by Zillow, 70% of purchasers stated that a rise in rates even up to 4.5% would not change their plans to buy a house in the next year.
With all of this being said, when does the spring market actually begin? This not only varies by town, but it also varies by weather. The amount of listings and the amount of active buyers determine it. Right now, we know demand is still strong with many active buyers searching, so in some ways, we are already there.
If you are thinking of selling this spring, consider the the three things that sell a home in any season: location, condition and price. You cannot do much about your location, but condition and price can be set by you. Be sure to get your home decluttered and tend to any deferred maintenance. For pricing, I can assist you with your market research so that you can select the best price when you are ready to list.