Buying a home is definitely a big decision to make. Not only are there several factors to consider, but there's also the budget and location which makes people apprehensive about buying a new home.
But as it turns out, 2016 might just be the year to move out with the old and in with the new - home, that is. According to CNN, there are several factors that are aligning perfectly right now, which makes the coming year the perfect time to buy a new home.
1. Home prices are going down
In case you missed it, real estate values have been going up for a while now. But apparently, they'll be much slower next year. According to Zillow's Chief Economist Svenja Gudell, prices are estimated to rise by 3.5 percent.
This is the time to buy a house, especially for those who haven't been able to because of the price increases, which can actually result in a huge pool of buyers.
However, that still doesn't mean that everyone can avail of this. Even though price increases will slow down, Zillow is anticipating that home values will still surpass wage growth, making it difficult - especially for lower-income buyers - to purchase a home.
2. More houses will be on the market
Because of the slower pace of home value increase, home owners will end up putting more of their houses on the market, as said by chief economist at Realtor.com, Jonathan Smoke.
But this is good news for those looking to buy, since they'll have more options to choose from. Not only that, but it is also expected that the new home market will get even bigger in 2016.
Builders will put more focus on constructing starter and middle-range homes, which makes it easier for buyers to purchase a new home.
3. Cheap mortgages may disappear
Many are expecting the Federal Reserve to start increasing interest rates in the near future, which also means that low mortgage rates will soon be gone as well.
It's better to avoid buying homes when the higher rates start increasing borrowing costs and mortgage payments. So better to jump on that purchase before it's too late.
Jonathan Smoke notes, "You are likely to get the best rate you will possibly see, perhaps in your lifetimes through the majority of next year, but certainly, the earlier the better."
4. Rents will put holes in your pockets
In the next year, rent prices are expected to go even higher. This means that in the long run, buying will be much cheaper than renting in most cities.
Don't think about the increasing mortgage prices because you'll ending up shelling out more money for rent than when you actually buy a house.
Trulia housing economist Ralph McLaughlin says that interest rates would need to see a 6.5 percent increase in order for buying costs to equate to renting costs on a national level.
