Planning to buy ahome in Washington in 2018? Here are three reasons why you might want to enterthe market sooner rather than later.
With the winterholidays upon us, home buyers across Washington State are now setting theirsights on 2018. And many are wondering if they should buy now, in early, orlater in the year. Here are three motivations for buying a house in Washingtonsooner rather than later, adapted from a recent report by CoreLogic.
Buying a Home inWashington in
2018: Now vs. Later
CoreLogic (a dataprovider for the U.S. real estate industry) recently published an updatedforecast and outlook for the housing market and broader economy. In its “U.S.Economic Outlook for December 2017,” the company’s economists gave some goodreasons for buying a home sooner rather than later.
In short, they expecthome prices and mortgage rates to continue rising in 2018. They also expecttight inventory conditions to carry over into 2018, which means home buyersmight have to look harder and longer to find a suitable property. All of thesemake a good argument for buying a home in Washington in early 2018, as opposedto later in the year.
1. Mortgage RatesExpected to
Starting with mortgagerates, CoreLogic points to policy changes at the Federal Reserve as one ofseveral factors that could boost rates in 2018.
The company wrote onits blog:
“TheFederal Reserve has signaled its plan to increase its federal funds target,pushing other short-term interest rates up including initial rates on ARMs … Fixed-rateloans are forecast to rise in 2018 by at least one-half a percentage point toas much as a full percentage point.”
Of course, this is justa forecast. And these kinds of predictions have been inaccurate in the past.But the consensus among economists is that mortgage rates will rise during2018, after a long period of hovering at historical lows.
So that’s one reason toconsider buying a home in Washington State sooner rather than later. Buyers whoshelve their plans until later in 2018 could encounter higher borrowing costs.
2. Home Prices StillMoving
Rising home values areanother factor that could affect Washington home buyers in 2018. This isespecially true in the Seattle metro area, where prices have risen sharply inrecent years. But the trend could affect the entire state of Washington, tosome degree.
CoreLogic’s Home PriceIndex (HPI) for the nation as a whole has risen at a 6% pace — or more — overthe past year. The year-over-year gains were even higher in the lower pricerange including “starter” homes. And this upward movement is expected tocontinue.
“We expect this trendto continue in 2018, with the CoreLogic Home Price Index for the U.S. upanother 5 percent,” the company stated.
This is another bigconsideration for those planning to buy a home in Washington in 2018.Postponing your purchase until later in the year could cost you.
3. Low Inventory inWashington
Real estate marketsacross the country have experienced inventory shortages over the last couple ofyears, and nowhere is this more evident in the Seattle area. All major citiesacross Washington have suffered from supply shortages. But it’s most pronouncedin Seattle.
“As low inventoryconfronts the rising desire for homeownership by a growing number ofmillennials, home sale conditions will favor the seller,” CoreLogic wrote.
Wecovered this market imbalance in a recent blog post, which predicted thatSeattle would .But these shortages aren’t limited to the Seattle area — they will affect homebuyers across Washington State in 2018.
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