Published By: Beckham Realty Group, Inc. December 30, 2018
If you have the New Year's Resolution to move into a new home or maybe even get into your first home in 2019, there's no better time than now! From interest rates to rising home values, rising rents and more, we've covered just a few reasons of many that highlight why it's a great time to make that commitment.
1. New Mortgage Standards are Making it Easier Than Ever to Buy
There’s new hope for getting a credit score boost if this was a determining factor for you before. Recently, all 3 major credit reporting firms (Equifax, Experian, TransUnion) removed negative factors including tax liens and judgments from credit reports. In addition, you may now be able to include your utility land phone and cable line, as well as cell phone bill factored into your credit, if you choose. This wouldn’t take effect until the earlier part of 2019.
2. The Biggest Mortgage Myth: You Don’t Need a 20% Down Payment
In this past year’s 2018 Bank of America Homebuyer Insights Report, when asked why they haven’t purchased a home yet, Not having enough saved for a down payment came in as the top response for 44% of people. The report went on to reveal that nearly half of all respondents believe that “a 20% down payment is required to buy a home.”
Contrary to Popular belief, you don’t need 20% down to purchase a loan. In fact, in more recent years, 71% of first-time buyers and 54% of all buyers put less than 20% down, with many who put as low as 6% down! Before regulation changes in the ’90s, people were told they needed a 20% down payment to make better interest rates.
Today that standard is unrealistic for many buyers, and we have more options than ever that cater to all types of buyers and eliminate the need for such high down payment. There are also many other perks to putting down a smaller down payment, including having more cash on hand for use in other investment purposes or for emergencies and paying off other debts.
3. Rents Continue to Rise
In the same 2018 Bank of America Homebuyer Insights Report just mentioned, 52% of renters said that rising rental costs were a top reason why they didn’t like renting, and 45% believed the costs would continue to go up.
If we look at the Myrtle Beach Market alone and some of our other blogs that highlights local market trends and costs to rent, we see that rising rents have been a trend the past couple of years. As just one example, rents in Murrells Inlet were currently averaging $1,440 year to date as of the Summer of 2018, whereas in 2017 the rent averages for the same area were $1387 in July.
Getting caught in the rental trap means you are essentially paying someone else's mortgage. And in many parts of our area, you can fair better with a monthly mortgage than the cost to rent a property of the same criteria.
4. Mortgage Rates are still at Historical Lows but predicted to Rise
The price of homes has gone up on the past year by almost 5 1/2 percent, and meanwhile, interest rates have stayed lower allowing many new homeowners to jump into the market. Just how low are the current rates in comparison to decades past? In the 1980s interest rates were as high as 12%, whereas they stand at less than half of that today, and even lower compared to where they were in the 2000s. Interest rates are expected to rise another quarter of a percent in 2019 as projected by The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae (source below).
One simple demonstration below shows how a rise in interest rates on a $250,000 house would impact monthly payments in hundreds of dollars by even a small shift in rates. This is comparable to an average price for a newer 3 bedroom/2 bath home in Myrtle Beach. Over the lifetime of your loan, you could end up saving thousands of dollars in the long-term costs.
5. Home Prices will Rise and Values will go up - You Don't Want to Miss out!
On average for 2018, home prices have appreciated by 5.6% according to Home Price Inside’s Report by CoreLogic. It is predicted they will rise by nearly another 4.7% over the next year according to the same report. We can see some of these same trends in the local Myrtle Beach market. Commercial real estate in the entire state is strong with a healthy economy.
In our recent local market updates, (Myrtle Beach) we have seen home values were up above the national average at 6.3% over the last year and projected to rise another 6% this upcoming year. Further west towards Conway, values this past summer was up almost 9% year to date, with an expected rise of another 6% by the Summer of this upcoming year.
In Summary, there are plenty of reasons to get into a home this upcoming year! These are just a few but there are so many more. If you are looking for any information about the Myrtle Beach area and the lifestyle it has to offer, relocation, looking for a good referral for a mortgage lender or simply want to talk to a professional, call Beckham Realty today. We are happy to get you in the right direction or into your new home.