As 2017 closes we're sure plenty of your clients are still looking for a mortgage loan at the lowest interest rate possible. Some experts believe that both mortgage rates and home prices may be on the rise for the final month of the year.
"I realize a purchaser has a budget and what the bank will realistically lend them; however, I would also suggest that they go in a higher priced range (I have a unique method and explanation in how to approach this), while still not breaking your pocketbook," said Philip A. Raices, owner/Broker of Turn Key Real Estate, in a recent The Island Now opinion piece.
"This market may keep going for another five years, all things being equal, because the inventory is so low and the demand is extremely high. From October 2016- October 2017 prices have increased approximately 6.9 percent and more in various regions throughout the U.S. (about 6.5 percent locally)."
It's a tricky time of year where we are all trying to be a little more cautious of how much we're spending. The only difference is, a first-time buyer will be even more cautious with their decisions.
It may be difficult to reassure your clients that you will A) find them an affordable home and if you're a loan originator or mortgage broker, B) find them an affordable mortgage with a respectably interest rate that they can afford.
It is likely that in 2018 prices will continue to rise though it depends on how active the market is and how much inventory will be available to prospecting buyers.
According to a recent Zillow Ideas & Research publication home values reached a 15th consecutive month of appreciation. Zillow also expects the shortage of homes to continue in 2018 and believe it could even be worsened bu plans proposed by the House and Senate.
"Plans proposed by both the House and Senate to amend capital gains taxes could further limit inventory," according to Zillow.
"The proposed policy would require sellers to live in a home for five of the past eight years to avoid paying capital gains taxes."
This is something to keep in mind as we come to a close this year. For more analysis and tips on how to deal with the growing prices and dipping inventory, click on the image above.