This time of year, many people like to take a moment and reflect on the year that has passed, whether it’s reflecting on good memories or how the nation is doing financially. Today, we would like to take a moment to reflect on the economy and what this year’s trends meant for real estate.
A Brief Look Back on the US Economy
The economy has done well in 2015 — personal income is increasing, new construction homes are on the rise, and the job market is strong. And looking to the new year, now is the best time to buy a home. Here are three main real estate-related takeaways from the United States’ past economic performance in 2015.
1. Unemployment is Decreasing
Unemployment this time last year was at 5.6%; the latest data from the Bureau of Labor Statistics states unemployment is at 5.0%. With more jobs and disposable income, home buyers have been able to spend more on their dream home than in past years.
2. Interest Rates May Continue to Increase due to the Federal Reserve Actions
The Federal Reserve as expected raised the interest rate at its December meeting for the first time in nearly a decade. This is a good sign — the economy is doing well and the job market is strong. This move was widely predicted and as a result, we did not see a significant increase in interest rates for home mortgages. However, the Federal Reserve has also signaled that if the US economy continues to grow, they are likely to gradually increase interest rates.
So what does this mean? For home buyers, these forecasted interest rate increases mean it will soon cost more to finance your next home. So if you are thinking about purchasing your first home or perhaps moving to a larger home or purchasing a second home, now really is the best time to make that move.
3. The Cost of Renting is Increasing
The rental market has been surging, according to the Joint Center for Housing Studies at Harvard, reaching a 20-year high this past year.
New apartment complexes have been built all over the nation to provide more housing, and due to this high demand for rental properties and lower vacancy rates, rent costs have increased. Plus, the new complexes that are being built tend to be luxury developments commanding ever higher rents.
For renters who are looking for a place to call their own, now is a great time to purchase a home. Lock in today’s low interest rates and you just mind find that your mortgage payment is less than your monthly rent payment.
Now is the Best Time to Buy a Home
With forecasted interest rate increases, current rent cost increases, and a growing economy predicted in 2016, now is the best time to buy a home.
As local real estate experts, Capital City Real Estate Group can help you find the home of your dreams and direct you to the best home buying resources, including a mortgage calculator, that can help you purchase the home of your dreams with confidence.
Connect with us and let’s talk about your home buying goals for the new year.