25 Jan What Home Buyers Should Expect in 2019?
Let’s get down to the nitty gritty. If you are planning to purchase a home in the New Orleans metro area in 2019, then pay close attention to these real estate trends.
Rising Mortgage Rates
Industry experts expect mortgage rates to reach five percent . How does that affect you? For every quarter of a percent increase, a buyer’s purchasing power decreases by 2.5%.
For example, suppose a buyer puts down 20% on a $300,000 home, and the interest rate is 4.5% with a 15-year fixed mortgage. If the interest rates increase to 4.75%, assuming the buyer wants his monthly payment to remain the same, he may only qualify for $292,500.
It doesn’t sound like much, but rising mortgage rates may force home buyers to shop for homes in farther-out neighborhoods. Some buyers may be priced out of the market completely. Buyers should discuss interest rates with their lenders to see how it affects their affordability to purchase a home.
Stabilizing Housing Market
Statistics show that home prices are stabilizing across the New Orleans metro area. Does that mean the market is shifting to a buyer’s market? Hmm not quite. Let’s not confuse softening home prices with falling home prices. This is still a seller’s market but without all the frenzy. Expect sellers to loosen up a bit in terms of price. Currently, we are seeing a slight uptick in predicated offers. A predicated offer is when a buyer makes an offer contingent on the sale of another property. This trend is great for buyers who want to trade up.
Overall, as the market neutralizes, home buyers can take their time and not feel rushed to make a decision.