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      Blog :: 2015

      Home Prices: Where Are They Headed Over The Next 5 Years?

      Projected Mean Appreciation | Keeping Current Matters

      Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey.

      Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

      The results of their latest survey:

      Home values will appreciate by 3.9% by the end of 2015, 3.4% in 2016 and 3.1% in each of the following four years (as shown below). That means the average annual appreciation will be 3.2% over the next 5 years.

      Projected Mean Appreciation | Keeping Current Matters

      The prediction for cumulative appreciation rose from 18.1% to 21.6% by 2020. Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of 13.8%.

      Cumulative House Appreciation | Keeping Current Matters

      Bottom Line

      Individual opinions make headlines. We believe the survey is a fairer depiction of future values.

      How Long Does It Take To Save a Down Payment?

      Years Needed to Save 10% Down | Keeping Current Matters

      In a recent study conducted by Builder.com, researchers determined that nationwide it would take "nearly eight years" for a first-time buyer to save enough for a down payment on their dream home.

      Depending on where you live, median rents, incomes and home prices all vary. By determining the percentage a renter spends on housing in each state and the amount needed for a 10% down payment, they were able to establish how long (in years) it would take for an average resident to save.

      According to the study, residents in South Dakota are able to save for a down payment the quickest in just under 3.5 years. Below is a map created using the data for each state:

      Years Needed to Save 10% Down | Keeping Current Matters

      What if you only needed to save 3%?

      What if you were able to take advantage of one of the Freddie Mac or Fannie Mae 3% down programs? Suddenly saving for a down payment no longer takes 5 or 10 years, but becomes attainable in under two years in many states as shown in the map below.

      Years Needed to Save 3% Down | Keeping Current Matters

      Bottom Line

      Whether you have just started to save for a down payment, or have been for years, you may be closer to your dream home than you think! Meet with a local real estate professional who can help you evaluate your ability to buy today.

       

      Buying a Home? Do You Know The Difference Between Cost & Price?

      Buying A Home? Do You Know The Difference Between Cost & Price? | Keeping Current Matters

      Buying A Home? Do You Know The Difference Between Cost & Price? | Keeping Current Matters

      As a seller, you will be most concerned about 'short term price' - where home values are headed over the next six months. As a buyer, you must be concerned not about price but instead about the 'long term cost' of the home.

      The Mortgage Bankers Association (MBA), the National Association of RealtorsFannie Mae and Freddie Mac all projected that mortgage interest rates will increase by about three-quarters of a percentage point over the next twelve months.

      According to CoreLogic's most recent Home Price Index Report, home prices will appreciate by 5.2% over the next 12 months.

      What Does This Mean as a Buyer?

      Here is a simple demonstration of what impact an interest rate increase would have on the mortgage payment of a home selling for approximately $250,000 today if home prices appreciate by the 5.2% predicted by CoreLogic over the next twelve months:

      Cost of Waiting | Keeping Current Matters

      Prices and Mortgage Rates Going up in 2016

      Prices and Mortgage Rates Going Up in 2016 | Keeping Current Matters

      Prices and Mortgage Rates Going Up in 2016 | Keeping Current Matters

      The monthly mortgage payment on a home is determined by two elements: the price of the house and the interest rate you pay on your mortgage. Recently released reports are revealing that the experts expect both elements to increase in 2016.

      HOME PRICES

      CoreLogic has projected a nationwide 5.2% home value appreciation for the next twelve months. Here is their breakdown by state:

      Pricing Forecast | Keeping Current Matters

      MORTGAGE INTEREST RATES

      All four of the entities that provide projections on mortgage interest rates agree: they're going up in 2016. Here are the predictions over the next four quarters:

      Interest Rates | Keeping Current Matters

      Bottom Line

      With both home values and interest rates projected to increase over the next twelve months, buying (or moving-up), sooner rather than later, makes sense.

       
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