Are you considering buying your home in St. Louis? With Fannie Mae and CoreLogic market predictions for next year, it seems that now might be the best time.
Higher Interest Rates
Fannie Mae (a government sponsored mortgage enterprise) is projecting mortgage interest rates to rise to 4.4% next year. This will increase mortgage payments and decrease the total amount of house you can afford.
Obviously, finance professionals are terrible at predicting the stock and housing markets, however, mortgage rates have been historically low for much longer than anyone could have predicted and the “Fed” (Federal Reserve) has been slowly raising the federal funds rate (the interest rate at which the government lends to banks who then lend to homeowners in return…it’s complicated but just know that this is the rate that largely impacts the mortgage interest rate you pay to your bank) and more rate hikes are expected later this year. This means higher interest rates.
Mortgage Rates in St. Louis are currently hovering around 4%
Higher Home Prices
CoreLogic, a company best known for their real estate data analytics, is projecting more price increases in 2018. The Company estimates that home values will increase by 5% by July 2018.
*In St. Louis, the average sale price has increased 2.8% from 2016 and 17.6% from the average sale price in 2013!
Should You Buy?
The answer is ultimately up to you. If you’re ready to buy but are waiting for the “right time,” you may cost yourself more money by waiting. Timing the market is futile and anyone who could time the market perfectly, would be incredibly wealthy as a result. The one thing that is (almost) certain is that mortgage rates will have increased by this time next year.
If you’re saving money for the down-payment or are not ready to make a purchase, then waiting is probably your best option. Making a home purchase is a big decision (like hundreds of thousands of dollars big….) and you need to make sure you’re prepared for the purchase. Don’t put yourself at risk or make yourself financially strapped by buying now just because rates are low now but will rise. If you’re not ready, you’re not ready.
If you want to talk about your situation to see if you can make a purchase, feel free to reach out for any questions: 636-224-4470
*Average Sale price in 2017 thus far is $247,195 compared to average sale price in 2016 of $240,327. Average sale price in 2013 was $210,159. Data obtained from market information provided to St. Louis Realtors through MARIS and was queried on 10/3/2017.