Investors had a good run in 2016 with interests rates as low as 4%. And a rise in the rates came with the new year 2017 at 4.25%.
The high interest rates translates to slow rate of increase in the prices of properties in the first four months of 2017 but the sellers will still carry the day.
Even though investors enjoyed rates as low as 3.75% in 2016 and closed the year with 4.24%, most financial forecasters predict that the interest rates will not go below 4% on the average 30 years fixed rate in 2017. It is still a good time for owning a home given that the rate has not shot through the roof.
If your resolution for 2017 is to buy a home, you need to get your income tax record right. Prepare and file your returns in good time because this is one thing that the lenders will look at in your application. When you do your 2016 returns, you will be able to get the documents that you need.
In the event that you get a tax refund, save it up for use as down payment for your mortgage. As a first time buyer, talk to an experienced loans officer who should take you through the application process and explain the various products available.
The national inventory for properties on sale was below 4 ½ months as the year came to a close, but there is hope for improvement if there is continuity in new homebuilding.
Finding a low priced property that is fits the budget of a first time homeowner is particularly hard because these kinds of houses were removed from the market since the debt owed on them was massive. According to Rick Sharga, chief marketing officer at Ten-X, this was the worst hit section in the real estate recession.
Generally, the rate of property sales in January and February in any given year is low, owing to the holidays that come with excessive spending. But because of the rising interest rates, buyers will want to make the commitment before they go up too high. Beginning mid-February and towards the end of march, the rate of selling will have gone up.
Sharga of Ten-X is convinced that prices of homes will rise slowly in 2017 because of the increasing mortgage rates. This growth rate is slower than in 2015/16. The slow increase should boost sales.
There is hope that President Trump’s administration will address mortgage big shots like Fannie Mae and Freddie Mac. The government supported establishment have since 2008 been under conservatorship and are being managed by a federal body. This move was for a short time but a decision is yet to be made as to the way forward for the two firms. Several stakeholders are in support of them being privatized.
Top government officials are also in support saying that privatization is being considered as a high priority.
President of MenloFinancial, Rick Roque is also in support of this idea. Once Fannie and Freddie are privatized, more capital will be put into the project which will make it possible for them to buy more properties from financial institutions which will in effect bring down the interest rates or prevent the rate from potentially rising again.
