Why 2016 is the Year to Buy

As we close the door on 2015, millions of home buyers will be closing the doors on their newly purchased properties, thanks in part to the slowly recovering housing market. 2015 has been the best year for real estate since 2007 and the financial collapse. According to The Boston Foundation, the Commonwealth of Massachusetts has experienced as strong if not stronger a recovery after the recession of 2008 than the rest of the nation, and experts believe 2016 will surpass last year’s success; so now more than ever may be the time for first-time and seasoned buyers alike to get [back] into the market. Employment and financial growth have been steadily on the rise, meaning there is a growing demand for listings. Here are some of the best reasons to consider entering the real estate market in 2016.

1. Cost of renting has become even more unaffordable.

According to Realtor.com, 85% of United States markets have rent that exceeds 30% of the household’s income. This naturally makes home buying more appealing as home prices are holding much more than the quickly increasing rental rates. This may be difficult for many without adequate credit, proof of income, and savings, but there will still be a substantial transfer from renters to home buyers due to these rates. Mortgage payments may very well be less than that of their rental counterpart, so paying towards an asset is a much more attractive arrangement compared to renting.

2. Interest Rates

The interests rates of 2015 dropped to an all-time low, and these rates won’t last forever, so many are looking to get mortgages based on last year’s interest rates. A study suggests that the mortgage rates will increase by 60 basis points by the end of 2016 from where they are currently at; so capitalizing on this is certainly a time sensitive issue.

3. Down Payments aren’t what they used to be

One of the main deterrents of home ownership is coming up with enough money for the down payment, which used to require around 20% up front. Now there are many different home assistance programs which allow for a much smaller down payment. The Fannie Mae and Freddie Mac Home Possible Advantage Program, actually allows for a down payment as low as 3% for credit scores above 620. While mortgage insurance is required in case of default on mortgages with less than 20% down, these insurance rates have also been reduced dramatically.

4. Housing Prices Stabilizing

Housing prices that have been on a consistent rise over the past few years are finally starting to stabilize. This not only means that there will be more people in the market, but also more home owners willing to list their properties. The supply and demand chain has suffered due to the ongoing growth in housing prices; but as the real estate market is beginning to normalize it will even out the number of people looking to buy, with those willing to sell.

All of these factors, in addition to the current tax breaks, make 2016 one of the best times in recent years to get into the real estate market. Real Estate will always be one of the best investments, and knowing when to capitalize on the markets trends is key in coming out on top. If you’re interested in buying or selling your home, find a respected, professional local agent to help you make a well-informed plan for your future housing needs.