According to the KCM Team home prices are expected to be on the rise as much as 5.4% in 2013. As I have said many times, if you want to buy, you should buy soon as not only prices are on the rise, but interest rates will go up as well. If home prices do rise some 5% in the next year, what does that do to the prices of homes? Take a look at the infographic below from the KCM Blog to see what a home costs now vs. in a year from now.
According to Freddie Mac,mortgage interest rates have held pretty much steady for the past three weeks. The 30 year fixed rate is holding at around 3.53% which is still less than the 3.87% a year ago. The 15 year fixed rate remained at 2.77% compared to 3.16% last year. The rates are still right around the record lows but are expected to rise this year.
30 year mortgages have been the norm forever it seems, but these days 15 year mortgages are gaining ground! With the low interest rates, most of the time by paying just a little bit more each month you can reduce your mortgage from 30 to 15 years. According to the Mortgage Bankers Association, in November 2012, 23% of refinanced homes opted for a 15 year mortgage which is 51% more than in 2011! Back in 2007, only 8.5% of refinances were 15 years.
Why 15 rather than 30 year mortgages? You will save thousands of dollars in interest over the life of the loan as you are paying down more principal each month and in most cases the 15 year interest rate is also below that of the 30 year. A 15 year mortgage is not an option for everyone, but if you can afford it, it is worth considering!
It sounds strange to say that there is a housing supply shortage but it is true! There is a shortage of homes under $300,000 that are traditional sales. There are foreclosures and short sales out there but for buyers that want a traditional sale, there is a shortage which is causing multiple offer situations resulting in unhappy buyers and happy sellers. Now with the spring market starting the shortage will only get worse. (more…)