Most importantly, mortgage rates remain historically low—but that isn’t expected to last.
In a recent Reuters poll, 45 housing analysts predict that by the end of 2019, the average rate for the 30-year fixed-rate mortgage likely will be above 5 percent.
So buyers who lock in a rate this year likely will have lower borrowing costs.
According to the Reuters poll, home values in the 20 largest metro areas are expected to increase by another 5.7 percent before the end of the year.
The National Association of REALTORS® predicts growth in home prices to continue in the coming years, but year-over-year growth likely will slow to 3 percent or 5 percent.
“Homeownership is long-term prospect,” says Paul Bishop, NAR’s vice president of research.
That is 6.1 percent lower than a year ago, according to NAR.
Construction is on the rise but new developments are only accounting for about 2 percent of the market, says Van Nieuwerburgh, adding that “we’re not building enough to alleviate those shortages.” While there are plenty of reasons why buying makes sense now, housing analysts are quick to point out that consumers shouldn’t take the plunge if they’re not ready financially or personally for the commitment.
Prospective buyers need to consider financial security, their location, and their job situation, says Bishop.
“Ultimately, you need to ask yourself: Are you likely to be in a particular location long enough that homeownership makes sense?” he says.