As we close the books on 2018, there are numerous factors in the real estate that are causing people to balk at purchasing a home. Whether it is the steady increase in mortgage rates, or fear of a depreciation in housing prices rivaling the Great Recession, it’s important to keep an eye on the market as a whole. Below are a few things to be aware of entering 2019:
- Mortgage interest rates are still historically low. Since the most recent recession, consumers have gotten used to interest rates in the 3-4% range. They have left that range, but are still at historically low levels as reﬂected in the chart (right):
- Arizona has experienced strong appreciation over the last several years. While a good portion of this appreciation mimics the national housing market, Arizona has a unique set of circumstances that should allow housing prices to continue rising. Numerous businesses are relocating to the state, which is causing a housing shortage. Also, housing as a whole is more aﬀordable than many other parts of the nation. This in turn should allow home values to continue increasing.
- Rising interest rates in the economic markets as a whole should make cash-out reﬁnances a more attractive option to consolidate debt. Increasing home values are creating a substantial amount of equity in homes that could provide the opportunity to consolidate more costly debt.
If you have any questions or need any advice, don’t hesitate to reach out!
- Don’t open new debts while in contract
- Don’t quit your job
- Don’t deposit substantial amounts of cash into your bank account.
- Disclose all debts
By Andrew Augustyniak, Branch Manager Prime Lending