We are officially into the new year and many people are embarking on their new years goals whether it be joining the gym or kicking bad habits. For another large segment of the population, buying a new Fort Lauderdale home may be on their list of accomplishments for 2019. If this is your goal, here are two factors that play a large part in the real estate market that you will want to pay special attention to this year.
Over the past year we have seen a slow and steady rise in mortgage rates, but with a slight change by the end of 2018. According to Freddie Mac’s latest Mortgage Market Survey rates had inched up to 4.94% in November yet fell to 4.62% at year’s end. Regardless of the dip, rates are projected to reach 5% during 2019.
The rate that you lock in will not only impact your monthly mortgage payment, but it will also have an affect on your purchasing power. In other words, your purchasing power being the amount of money that you have to spend on a home. As rates increase, the price of the home that you can afford will decrease.
In a healthy and “normal” real estate market, there should be 6 months worth of inventory for home prices to increase in line with inflation. According to the National Association of Realtors, there is only roughly 3.9 months of inventory supply which is still far below the normal level. What this means is that there will still be pressure on home prices potentially causing them to rise more rapidly.
The trend for inventory over the past handful of years has been on an downward decline, but in the last 6 months there has been a slight shift where more homes are becoming available. This is an interesting trend to keep an eye on as if we continue to see more homes on the market for sale, then we can be moving towards more of an even keeled or normal market as opposed to a seller’s market that we’ve been experiencing for quite some time now.
If you have any questions about the local Fort Lauderdale real estate market, contact me today.