Traditionally the real estate market tends to be slower at this time of year, at the beginning of the winter holiday season and into the New Year. This is probably because people are strapped for cash, and it can be a pretty busy time for everybody, and as a result most markets don’t begin to pick up until the end of January.
This is one of the reasons why data is often seasonally adjusted. However an article in AOL points out that there are good reasons why serious home buyers should ignore this trend, and should instead look for ways to turn it towards their advantage. The article looks at key factors that are worthy of consideration by serious home buyer before they decide to put house hunting onto the back burner.
Amongst these considerations is the fact that mortgage rates have fallen after rising quite sharply in the late spring as the housing market gained momentum, and demand for mortgages increased. At the moment mortgage rates are still pretty low and even though this trend looks set to continue as the Federal Reserve is likely to keep interest rates low for the time being, there are still other reasons to buy now.
Most people will be looking to have a government-backed mortgage, and this means they are restricted on the amount they can borrow in their desired area. For the majority of markets this figure is $417,000. However it’s likely that these limits will be reduced next year, and even though the change will be introduced gradually it may be worth taking the plunge before then, especially as home prices are continuing to rise in many places. From next year it will also be tougher to qualify for a mortgage that is insured by the Federal Housing Administration. Starting in January next year, would be homeowners will have to supply more paperwork to prove the amount of debt they carry doesn’t exceed 43% of their annual income.
At the moment there’s also less competition for homes, as investors are no longer so keen to purchase property in the US. A recent survey found just 20% of investors are looking to buy more homes, showing this figure has reduced by half since 12 months ago. In addition applications for new mortgages have declined over the past few months, so those looking to buy a home in the near future face less competition. At the same time some sellers may be more motivated to try to shift their home before the end of the year, and while homes may look less attractive at this time of year, hopefully you’ll be pleasantly surprised come spring.