We are presenting "Mortgage Mondays" in Association with Christie Mahoney, Sales Manager and Loan Officer at Evergreen Home Loans. Christie will be giving us information to pass on to you that should help increase your knowledge of Mortgages. Here is what Christie is passing on this week:
Q: The big question, should I buy now or wait for the “bubble?”
A: Many factors play a part in this decision, three of the big ones are: Rates, Home Prices, Rental Market
So let’s start with rates. Based on all of the market indicators if there are no major international changes, rates are now at their lowest levels we'll likely see over the next few years, or even decades. Patience in today's market might yield nothing but a higher price tag on your mortgage.
In fact mortgage rates just broke a barrier not surpassed in more than four and a half years.
Since August 2013, rates had remained below 4.58%, that is, until the late stages of April, according to mortgage agency Freddie Mac.
The 30-year fixed rate average is up 80 basis points, or 0.80%, compared to lows reached in September 2017. So in a nutshell rates are going to keep going up-which as you know just makes payments go up on buying a new home.
The housing market pricing is predicted to slow just slightly, it is expected to return to more “normal” rate of appreciation. Since 2012 we have been seeing appreciation in the double digits and they are predicting as a state overall we should come back to around 7% by 2019. This is still an increase however. So if you are looking today at a home listed at $350,000 in 6 months at 7% it would look more like $362,250.
Renting…. The Central Oregon rental market is one of the highest markets in Oregon right now-barely second to Portland. Same problem no inventory and high demand. The average rent on a 3 bedroom home right now is just about $1500, and that is honestly if you can find one. The other thing to keep in mind is you do lose your mortgage interest deduction on your taxes while renting-this I would recommend consulting your tax advisor about. After you sell and begin renting you are also no longer gaining the appreciation on the home you owned that the market is gaining on the next home you might buy.
Of course none of this is set in stone or guaranteed. All any of us can do is look at the trends, what is happening, what has happened and make and educated guess at what will happen. If you ever have any home buying questions please always feel free to reach out!"