If you have been considering buying a house but haven’t quite reached the point where you are positioned to do so, it may be your year! Heres why:
1- Home Prices will likely be calming down this coming year.
According to Zillow’s prices are expected to rise 2.6% nationally over the next year. This is significantly lower than the 4.3% that they rose this year which has encouraged buyers to hold off due the rising costs.
2- More homes will hit the market.
This past year has been good for builders, at least speaking to the greater Idaho Falls region. Many builders who have built spec homes haven’t had to sit on them for long before they sold. Many homes sold before they were substantially complete. This will likely lead to more spec homes being built this coming year.
3- Interest rates will likely increase
This is admittedly speculative, but many experts along with the Federal Reserve have talked about how interest rates will increase over the next year. If you are going to buy, take advantage of the interest rates we have today. You can literally save thousands on your loan.
A rule of thumb that is well known in the real estate industry is that for every 1% increase in interest rate, your purchasing power decreases by 10%. A quick example for that is that if you can afford a 100K house today and interest is at 4% you would be paying about $480 per month. If interest goes up to 5% and you want to pay that same $480 then you can only afford a 90K house.
4- Renting will still hurt.
Rent prices are expected to continue to climb, so in most cities buying will be cheaper than renting. It appears that this is true for Idaho Falls as well. A quick search for rentals in Idaho Falls pulled up a newer duplex/twin home that’s 1400 SF and is $900 a month. The that is shown here was listed and for sale at 129K., and your estimated monthly payment would be less than $750 including taxes and insurance.
So, if you are thinking a home purchase is in your near future, start preparing now. Get prequalified for your loan and start familiarizing yourself with what houses are in your price range and what you are looking for. We can set you up on a search so that you have all the information you need.