America’s economy is set to grow at around the fastest pace seen in a decade, forecasts mortgage investment firm Freddie Mac. A solid expansion will encourage increased household formation and subsequent home buying.
However, Freddie Mac believes interest rates will rise this year, so it’s important to act on your home purchase plans soon. Real estate values are expected to go up three percent in 2015, as well.
Consumer price inflation is predicted to increase by a total of almost seven percent from 2012 through 2015, says Freddie’s chief economist. Yet residential home values are forecast to rise about 23 percent over that same period.
We’ve returned to the traditional pattern of house prices rising faster than inflation. Homeowners have watched their net worth grow over the years in part because of this dynamic. Paying off your home loan over time is another way owners cause their equity to increase.
Owners also aren’t subject to rising housing costs the way renters are. Anyone with a long-term mortgage knows their monthly payments won’t change as long as they own their home.
Higher personal incomes and an increased number of houses on the market since last fall have made it easier for prospective buyers. A drop in mortgage rates completed the conditions which in recent months have caused more households to begin shopping for homes.
A stronger home sales trend first appeared last fall. Sales rose from one month to the next and also were higher than in the previous year, according to the National Association of Realtors.
Remember that waiting to purchase could cause you to miss out on some terrific properties or pay more than you otherwise would need to. Once you know you can obtain financing on good terms, you shouldn’t hesitate to look for your next residence.