Summer is largely regarded as prime home buying season. Now that the days have cooled off and children have started school again, many home sellers may believe their chances of finding a buyer in 2016 are slim.
However, the National Association of Realtors recently pointed out that this may not be the case. Sparse inventory and rising home prices may have caused some families to delay their purchase. As a result, there may be more fall buyers than usual this year.
Real estate agents help with the transition
Many parents prefer to find a home before the school year starts. Switching schools can be challenging, and even more so once the year has already begun. However, Tom Salomone, president of the National Association of Realtors® and the broker-owner of Real Estate II Inc., in Coral Springs, Florida, explained that parents who are still looking for a home shouldn’t worry too much. By working with a real estate agent, the whole process may go more smoothly.
“Many home buyers work with a real estate agent when shopping for a new home.”
“If you are thinking of buying or selling a home this fall, don’t be intimidated by the market or process while kids are back in school; overall, the fundamentals of the market are strong,” he said. “A Realtor® helps get sellers ready to sell and buyers ready to buy – whether or not they have children – and knows the ins and outs of the real estate transaction and the market where you want to buy or sell.”
NAR pointed out that many home buyers work with a real estate agent when shopping for a new home: 89 percent of buyers age 35 and younger and 87 percent of buyers age 36 to 50 use real estate agents. These are the demographics most likely to have school-aged children.
Potential market changes this fall
While buying a home in the fall doesn’t have to be a negative experience, it’s also important for home buyers to pay attention to the market. Fluctuations can affect their ability to obtain a low-cost mortgage.
Mortgage interest rates are at relatively low levels right now, which is a positive for buyers who want to save money. Rates are related to the benchmark funds rate, which is set by the Federal Reserve. Last December, the Fed raised this rate for the first time since around the time of the housing crash with the intention of steadily increasing it throughout 2016.
Yet, there have been no additional increases due to an unexpected weak economy at the beginning of the year and global changes, such as the Brexit vote in June. There is one more opportunity for the Fed to raise interest rates this year, and it’s coming up shortly before the presidential election: The next scheduled Federal Open Market Committee meeting will take place Nov. 1-2. Naturally, many industry experts have a close eye on Federal Reserve Board Chair Janet Yellen and are speculating on what will happen at the meeting.
In a recent speech, Yellen noted that raising interest rates is more feasible now than it was at the beginning of the year, according to U.S. News & World Report. She pointed out the strengthened jobs market and increased household spending that has been observed in the past few months.
However, she balanced these comments out with allusions to an inflation rate that is lower than the Fed would like to see and other circumstances that could result in the interest rate remaining unchanged. It’s likely that Yellen and her colleagues will wait to see what economic data September and October bring before making their final decision at the FOMC meeting.
Another matter to take into account is the upcoming election. In an article for MarketWatch, Mark Hulbert pointed out that a rate hike immediately before a presidential election is rarely seen. There have only been four instances of this since 1990, and three of them resulted in a lower interest rate.
It seems unlikely that mortgage rates will increase very much in the near future, but there is always the possibility. Buyers looking for a home may benefit from making a move sooner rather than later.
For more information about what rates you qualify for, contact the experts at Lenox/WesLend Financial or call 844-225-3669. As heard on the radio, it’s the biggest no-brainer in the history of mankind.