Even though 30-year fixed rates dropped in the first half of January, many analysts expect fixed mortgage rates to go up somewhat in 2014, but to top out at around 5%. What this means for buyers looking for real estate in Maplewood, NJ and surrounding towns is that while higher than 2013’s historic lows, the rates will remain favorable and predictable for homebuyers.
What is less predictable is the potential rise in home prices. In fact, a Fannie Mae survey shows that more than 90% of the nation’s consumers believe that home prices are likely to rise and that potential buyers should start looking sooner rather than later. Nationwide, home values rose as much as 10 to 20% last year and many consumers expect at least another 3 percent rise in the coming months. One factor driving home prices up is the lack of available inventory. Many homeowners have placed their homes on the market, but according to the Fannie Mae survey, at least 33 % are under the impression that this climate is great for placing their homes on the market. If inventory rises, prices may remain stable for awhile, giving buyers the opportunity to solidify their financial situation, set a budget, gather their down payment, double check their credit report and get preapproval for a loan.
Another potential driver of home prices is the cost of materials for new homes and remodels. The aftermath of disasters such as Superstorm Sandy and various wild fires has pushed the price of lumber up more than 5 percent overall last year. Labor cost increases due to changes in many state minimum wage laws and immigration rules, as well as rising insurance costs affect materials costs too. For sellers, this means placing your home on the market now has to potential to get it sold faster, and at a moderate price increase. As interest rates go up, however, prices will correspondingly come down to adjust to buyers’ debt-to-income ratio. To set the appropriate price on your home, work closely with your professional real estate agent.
Thinking of selling this spring? It’s a great time to sell your home in my core marketplace– Maplewood, S. Orange, Short Hills, Millburn and surrounding towns. Call me to discuss your neighborhood comparables and the “mood” of the housing market in your area.
Allison Ziefert, Keller Williams Mid-Town Direct Realty, Maplewood, NJ www.azhomesnj.com