There are two significant trends happening right now that you should know about: mortgage interest rates are increasing and Austin real estate inventory is decreasing. This means that, if you have been on the fence about buying, now is the time. Likewise, if you want to sell your home and have been “waiting for the housing market to improve,” the market seems to be shifting in your favor.
In February 2012, the Austin real estate market had 4.2 months of inventory, 1.5 months less than February 2011. Typically, around 6.5 months of inventory represents a market in which supply and demand for homes is balanced. In other words, Austin is already in a “seller’s market” and inventory continues to decrease.
Mortgage rates have increased over the past few weeks and experts believe this trend will continue (refer to links below). For Buyers, this means that your monthly payments would increase as well as the total amount for the life of the loan.
Example: These are numbers for a $300,000 home purchase (30 year conventional loan, with $7,000 in property taxes and $1200 in insurance, annually).
3.99% (rate a few weeks ago)
- Loan: $285,000
- Monthly payment : $ 1,358.99
- 30 Year Total: $ 489,237
4.75% (possible rate in the near future)
- Loan: $285,000
- Monthly payment : $ 1,486.69
- 30 Year Total: $ 535,212
As you can see, even a moderate increase in mortgage interest rates would significantly affect your payments.
The Austin real estate market is very much alive and well, so if you or anyone you know is thinking about buying or selling, please contact us. We have been developing, buying, selling and managing real estate for more than a decade now. Like any career, when you dedicate yourself to a subject matter you become an expert.
We will recognize your business and/or referral and ensure that you know – and will never forget – how much we appreciate you.