Do the Real Estate Trends of 2016 Favor Buy Now or Wait? - Team Lassen

Do the Real Estate Trends of 2016 Favor Buy Now or Wait?

The fall and winter months are often the  best times for home buyers. The homes on the market include the most motivated and there is much less competition from other buyers. This will leave you in a much better negotiating position compared to the spring and summer, the traditional real estate season. However, the real estate market trends of 2016 are changing at year's end. Does the outlook favor buying now or waiting?

As reported by Bankrate.com, the interest rate on a 30-year fixed rate was 4.01 percent on November 16th, up from 3.64 percent on September 14, 2016. What is causing the increase? Things like U.S. Treasury bills, bonds, and notes directly influence the interest rates on fixed-rate mortgages. Since Donald Trump won the 2016 U.S. Presidential election, there has been a stock market feeding frenzy, as investors begin to bet on a growing U.S. economy. 

U.S. Treasury bills, bonds, and notes are used by investors as a form of safety. As of November 17th, the 10 Year Treasury Rate was at 2.29 percent, up from 1.70 percent on September 14, 2016. When demand for U.S. Treasury bills is high, the interest rates go down, but when demand is low, the interest rates go up to become more attractive. As the rate for U.S. Treasury bills increases, the interest rate on fixed rate mortgages also increases.

According to the Mortgage Bankers Association (MBA), mortgage applications fell 9.2% the week after the 2016 U.S. Presidential Election. The main cause was the abrupt spike in mortgage interest rates. If this trend continues, 2017 will see much higher mortgage interest rates than in recent years. Therefore, now is the best time to buy, before the mortgage interest rates get any higher. Don't you agree?

What haven't we covered yet that is important to you? If you would like to talk about if the real estate trends of 2016 favor buy now or wait, or need more information, please contact us.

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