When you’re planning to buy a new home, timing is crucial. Apart from being both financially and emotionally ready in purchasing a new home there are still other factors that can help you decide when to buy a house.
Economic forecasts vary every year, and rates for mortgages change daily, but since the Great Recession, they continue to post a great bargain. These days, when you find a rate you like, it makes sense to lock on that sweet deal, after you’ve scoured the market for the best rates of course. The question is, is 2020 the best year to buy a new home? This year the 30-year mortgage rate just hit its eighth record low. Just a month ago the average rate on a 30-year fixed mortgage was higher at 3.14%, compared to the current 3.06% rate.
What does this mean for onlookers? The low rates give potential home buyers more purchasing power and thus result in stronger demands in the real estate market. According to Freddie Mac’s chief economist, Sam Khater, they’re expecting rates to stay low and continue to propel the purchase market forward. About 18 million homeowners are given the opportunity to save money by refinancing and this is truly a relief for a lot of people during these uncertain economic times with lower monthly mortgage payments.
How far will they drop? Someone like you who’s seeking to purchase a new home or refinance next year would want answers, and for guidance we did a little research, and according to several leading housing authorities, if it doesn’t stay at 3.06% it will most likely lead to a more significant steady drop.
For comparison, the rate on a 30-year fixed rate mortgage was 3.72% on January 2. That kind of decline results in a significant drop in your monthly payment. For example, a 30-year fixed rate mortgage for $300,000 at 3.72% gives a monthly payment of $1,384. But the same loan with an interest rate of 3.12% falls $1,284, saving you a full $100 per month.
Barbara Friedber, MBA at Robo-Advisor Pros. says, “With interest rates at the lowest level in decades, if you’re in the market for a home, now is a good time to buy,” She continued, “Just remember to lock in the low rates with a fixed rate mortgage. You’ll find mortgage brokers attempting to sell you a variable rate – but stick with fixed to lock in the low rates. Also, depending upon the competitiveness of the real estate market in your region, you may be able to negotiate a lower price.”
These forecasts serve their purpose in allowing you to position yourself in the market. These are merely predictions on the market during this pandemic and home buying decision is primarily based on financial and economic factors. The decision to buy a new home is often driven by a need or desire more than anything else. 2019 rates are already considered to have historic lows, and no one can actually determine when the tables will be turned against your favor. We are already experiencing an all-time low in the market, so if you find the right house and it fits neatly within your budget, it’s best to buy now. 2020 is the perfect year to seize that same opportunity.
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