If you’re racing to buy a home before prices and mortgage rates go through the roof, you’ll need to hire the right team to help you reach the finish line.
If you’re borrowing money, start with a mortgage expert, then select a real estate agent.
Sounds simple enough, but plan to be thoughtful about these selections. Getting just the right professionals can make a big difference as you navigate a marketplace where sellers have the upper hand and buyers compete for the best properties.
The National Association of Realtors predicts sales of new and existing homes will climb this year and next after dropping in 2014. The median price for an existing home will climb to $229,600 by the end of 2016, up more than 10 percent from $208,300 in 2014. The median price of a new home will reach $300,500, up 6 percent from $283,600 for 2014.
For the week ending June 11, the rates on the most common home loans, 30-year fixed-rate mortgages, climbed to an average of 4.04 percent, up from 3.87 percent the previous week but down from the 4.20 percent average of early June 2014, according to Freddie Mac.
The Mortgage Bankers Association predicts rates will continue to climb, averaging 4.4 percent by the end of 2015 and reaching 5.3 percent by the end of 2016. You’ll feel the difference if you wait. At 4.04 percent, a $100,000 mortgage loan would cost you $480 a month for interest and principal alone, amounting to $172,800 over 30 years. That same loan amount at 5.3 percent would run up the monthly payment for principal and interest to $555, or $199,800 over 30 years, an extra $27,000.
(For more details on rates, see the Money Talks News Solutions Center for a mortgage rate comparison.)
More buyers are also entering the market, the association says.
“Mortgage application volume rebounded strongly in the week following the Memorial Day holiday … purchase activity is up over 6 percent, while refinance activity is down 5 percent,” says Mike Fratantoni, MBA’s chief economist. “Strong job gains in May and initial signs of wage growth are supporting the purchase market.” READ MORE