It is time to get off the fence before values rise and while mortgage rates are so low.
Cost to Waiting: Housing is poised to get hotter next year, setting the stage for appreciation.
Disneyland is known as “The Happiest Place on Earth.” Yet, sometimes the amusement park can be so crowded. The lines for Space Mountain are often the longest. So many people take a look at the length of the line and turn around claiming that they will try to wait for the perfect time. They rationalize that the evening will be much better after a ton of families with little kids leave for the day. To their dismay, after returning to check the line in the evening, the line has not changed. In fact, it is a little bit longer. Was it because of the warm evening? Did all these people in line try to time the line too?
Many buyers are trying to time the housing market. They too are trying to wait for the “perfect time.” They hear that the real estate market is doomed, that housing is on the verge of a bubble, or how the next downturn will be worse than the Great Recession. These buyers are sitting on the fence and are waiting for it to be there turn. It is inevitable, right? Unfortunately, all the noise, is just that… noise. The facts and data simply paint a completely different picture.
It has been frustrating being a buyer. From 2012 through the first half of 2018, everybody was acutely aware that there was a supply problem. That changed last year when the active inventory ballooned from August through Thanksgiving. There was finally a lot more supply, but it was only due to a demand problem. Demand dropped as mortgage rates climbed all the way to 5% in November. Everybody thought it was the beginning to the end of housing’s 6-year run-up.
But that was then, and this is now. Mortgage rates today are at 3.75%. This year has been all about recovering from the sting of high interest rates and low demand. Rates continuously dropped and bottomed at 3.5% in September. They had plunged by 1.5% in such a short period of time. It was unprecedented.