Ted Jones, Stewart Title’s chief economist, says now is inarguably the right time to buy a home. Those who have been waiting on the sidelines, struggling with rising rent and dreaming of a place to call their own should wait no longer, according to Jones, who believes we are in the perfect market to promote homeownership. Here are five reasons why:
Jobs are up. “Jobs are everything,” says Jones. “In the last 12 months, we’ve created 2.65 million new jobs. Year-over-year job growth rates are up 1.88 percent. Leisure and hospitality is booming, so consumer confidence is clearly up. We feel really good about the future right now.”
Interest rates are low. Jones comments that current interest rates are below 4 percent. “I don’t think I have ever seen cheaper rates,” he says “and I likely won’t for the rest of my life. Affordability is high right now.”
While wannabe buyers should certainly opt in right now, Jones also notes that existing homeowners should consider refinancing. “Homeowners with rates above 4 percent who will be in their home for five or more years should consider refinancing. Call your local lender. Shop it around. If you can, consider the 15-year loan over the 30-year loan.”
Prices are rising. “People who purchased a home a year ago basically got their first year of ownership free, based on increase in home value,” Jones notes. November 2015 showed us a 5.1 increase in pricing, according to Case-Shiller. As prices rise, more and more people are realizing the time to buy is now. “The quicker you purchase a home, the more home you can afford before values go up,” says Jones.
Fuel costs are down. Cheap energy costs mean many consumers can now afford higher mortgage payments, according to Jones. Lower electric bills and savings on gas mean more in the bank for that monthly payment.
Technology makes it easy. “The Internet is the backbone of the changes taking place in real estate,” says Jones. Over the last decade the Internet went from useful to absolutely necessary in the home-buying process. New platforms and tools are being created every day to help the agent and the client operate seamlessly. Jones comments that Stewart Title has recently partnered with ZipLogix, making use of their Zipform—free to every member of NAR. “You can click a button to order escrow and title services,” says Jones. “It’s so easy, and so innovative.”
So what does 2016 hold for homeownership? Jones predicts a 4.9 percent increase in home sales, and a bump in values, too. “Home values will go up, maybe not at as strong a pace but still moving,” Jones affirms.
Planning the right time to buy a home, according to Jones, is much like planning the right time to plant a tree; the right time was last year. “The quicker you plant a tree, the bigger it grows,” he says. In this current marketplace, the faster you become a homeowner, the sooner you reap the benefits.