1. Mortgage Interest Rates Are Projected To Increase
Keeping up on the Real Estate market trends can be difficult. Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have hovered around 4.8%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase in 2019. According to a recent article on CNBC, the fed plans to raise their rate 3 more times in 2019!
An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.
2. Real Estate Sales Prices Will Likely Decrease
What does this mean for Illinois sellers? The increase in mortgage rates will make it more expensive for consumers to borrow money. This makes it harder to borrow money, and, consumers won’t be able to afford the same house they can afford today. This will organically drive home prices down since buyers won’t be able to afford the homes they would currently be able to purchase in today’s market. Take advantage of the time of year. Fewer homes on the market, gives the sellers more leverage. As interest rates continue to rise, and more homes hit the market (spring/summer time) this will only continue to drive prices down. Here’s a link to another supporting article “Bank of America Calls It: The Peak In Home Sales Has Been Reached.”
3. Either Way, You Are Paying A Mortgage
There are some renters who have not yet purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.
As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person building that equity.
Are you ready to put your housing cost to work for you?
I don’t want this article to come across as all “Doom and Gloom” for the Illinois Real Estate market. Although interest rates will increase, they are still historically low. Don’t be discouraged by the lower home sale prices if you plan on staying in your home for the long term. In the short term, however, it might be a good idea to sell your home sooner than later to get the most out of your home sale.