These past few months have proven one thing — you can count on absolutely nothing. Even with massive unemployment, the stock market is up, areas are re-opening and commerce is ramping back up. It is a very strange moment in history. And, of course, nothing is guaranteed which makes it more interesting.
We currently look like the proverbial phoenix of Greek mythology right now in the real estate sector. Where home prices were expected to decrease over the past few months in reaction to the chaos, instead they rose.
Increase in Home Prices
And not just a little bit. According to CoreLogic’s latest Home Price Index Report published earlier this month, there was a 4.9 % year-over-year increase in June which was up from the 4.1% increase reported for May. This was the “fastest monthly gain for the month of June since 2013.”
The Home Price Index went on to further state that their forecast model predicts that home prices will continue to post annual gains through the end of the year, with perhaps a small decline in the coming year.
CoreLogic’s Chief Economist Frank Hothaft reported that home prices “really rebounded much more strongly than I think any of us had thought they were going to.”
According to many in the industry, this change in mindset was in large part due to the updated unemployment projection by IHS Markit, a global data publishing company. Their forecast was based on an updated projection showing less severity in unemployment than was reported in May.
It’s the Interest Rates, Silly!
National Mortgage News has reported that our current record-low mortgage interest rates are also what kept the housing market strong during the last few months. With these low rates, new buyers were able to afford approximately $32,000 more house than they could have the previous year.
James McBain of Liberty Capital Services explained, “That means that the affordability factor was the highest it had been since 2016. Consequently, we saw that more millennials were taking advantage of these rates and affordability.“
In fact, every state has posted annual increases in home prices except for South Dakota. The only metro area that reported a downturn was San Francisco.
The Hottest Zip Codes in the nation as of August 30 2020 includes Columbus, Ohio (Reynoldsburg) Median list price $ 204,000 making Columbus, Ohio most desired city in the Midwest Region!
So, what can this mean for the average home buyer today? Add all this optimism to today’s current interest rates and you have a recipe for success if you are thinking of buying right now and can afford it. And with the Federal Reserve’s commitment to keep interest rates low, they may stay that way into the next year.
If you have been on the fence about buying or even refinancing, this could be the time to make a move. We would be glad to talk to you about a refinance or prequalification for a new home loan.
Buy a Home in Ohio With Liberty Capital Services
Liberty Capital Services are mortgage brokers licensed to do business in Ohio. They work with many different institutions with many different products, so they can offer one-stop shopping convenience. Call them today at (614) 505-0620 to see if this is a good time for you to make a move toward a new home.