With spring around the corner, home buyers have started hunting for a new home. However, the housing market in transition might make it difficult to find exactly what they are looking for.
The New Year has started with a dip in the 30 years fixed interest by 4.54 percent compared to last year. This reduction in the interest rates along with the modest increase in home prices has given buyers an advantage in the real estate market. According to Nela Richardson at Edward Jones Investments, the coming year will not show as many record sales as witnessed in 2017, but mortgage rates have reduced considerably. Richardson who is also the former chief economist Redfin believes that this will turn into a huge advantage for buyers.
Although, the interest rates were not the only reason that caused many buyers from pulling out in 2018. Richardson said that the reason why many home buyers were not able to find a home that was within their budget. This will not probably change in 2019. A rumor has been going around in the housing market that you will be seeing play out this year. Reports will come out stating that inventory in on the rise, but the increase will be at the price points, making it unaffordable for first-time buyers or millennials. In fact, Richardson stated that this has been persistent for the past five years. Richardson also noted that sellers and buyers could expect to see savings in real estate agent commission fees this year.
Although a real estate agent is highly valued, technology is constantly improving and making the process from efficient and affordable for home sellers and buyers. However, it is not time yet to bid adieu to real estate agents.
The major overhaul in the federal tax code in 2018 has created large implications for homeowners. People who are applying for a new mortgage in 2019 will be able to deduct interest on home loans only up to $750,000. This has gone down a lot for the previous $1million. A $10,000 deduction cap has also been introduced in state and local taxes. Richardson believes that the changes in the federal tax code do not have an impact yet.
With natural disasters like Hurricane Harvey becoming the norm, homes without proper coverage that gets damaged are on the rise. Prospective homeowners need to start considering the potential risk of a flood or any other natural disaster when they are considering purchasing a home.