Troy Hansford for Denver Real Estate | 303-617-0607 | HansfordTeam@TroyHansford.com
          

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Should You Stop Renting and Buy Now?

How did the December 2017 real estate market do and when is the best time to buy a home in 2018?

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The numbers are in for the December 2017 Denver real estate market.

According to the South Metro Denver Realtor Association, the number of new listings has been down 6.1% for the last two years from 2,368 new listings in December 2016 to 2,224 in December 2017. The number of sold homes is also down, dropping by 10.2% from 4,308 sales in Denver 2016 to 3,868 sales this past December.

At the same time, the median price is up 10.8%.

What do all of these numbers mean for you in the 2018 market?

Inventory and homes sales both dropped, but the median sales price increased. That means buyer demand is outpacing supply.

One reason buyers are actively looking for new homes now is because interest rates are still low. Rates are predicted to go up three times in 2018.

If you do plan on buying a home, it’s better to make your move now rather than later.

If interest rates do go up, you have less purchasing power. Every 1% increase in interest rates will cost you 11% in purchasing power.

Not only that, home prices are still on the rise as well.

For example, let’s say you are currently paying $2,000 a month in rent. You qualify for a $375,000 house right now. However, you decide to wait until June for a better deal.

Let’s say you wait and by June, home prices have increased by 6% and there’s been a 0.5% increase in interest rates.

Your $375,000 house is now worth $397,500. You’ve lost $20,635 in purchasing power, and you spent $12,000 to continue renting and wait for a better deal.

Ultimately, it makes more sense to buy now. Home prices will only increase throughout the spring market, and securing a low interest rate now will save you a lot of money in the long run.

As always, if you have any real estate questions, just give me a call or send me an email. I would be happy to help you.