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!
QUICK TIPS:
- 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