One of the most festive aspects of the holiday season happens to be perfect for…
You’re probably not very surprised to learn that real estate values in Austin and the surrounding areas rose again last year. According to the Austin Board of Realtors, home values increased by a respectable 7% from the previous year for the metropolitan statistical area of Austin and Round Rock. During that same time, single family home sales jumped more than 15% with double digit growth seen in not just Travis County but Hays and Williamson as well. The median home price at the end of 2016 clocked in at $294,245. Higher home prices also mean higher monthly payments. Yet even though the median home values are approaching the $300,000 mark, the conforming loan limit is still higher than the median.
Fannie Mae and Freddie Mac recently introduced the new conforming loan limit raising it from $417,000 to $424,100 for 2017. That’s the first increase in the conforming loan limit in a decade and still well above the current median home price in Austin and surrounding areas. If you’re VA eligible, the VA loan limit was also increased to match the limits established by Fannie Mae and Freddie Mac. For FHA loans, the limit was also increased slightly here in Travis County to $361,100. Hays and Williamson Counties followed suit.
You may also be aware the Federal Reserve voted to increase rates for the first time in a year as the Fed bumped the Federal Funds rate by 0.25%, matching a similar increase in December 2015. Recent comments by Fed governors, and specifically Fed Chair Janet Yellen, there will likely be three more rate increases coming in 2017 and in all likelihood at every other round of FOMC meetings, or about once per quarter. That’s looking into a proverbial crystal ball but the comments can’t be ignored.
Okay, so what do we have here? We have higher home prices, higher loan limits and higher rates. You see the trend. The obvious fact is if you’re waiting for rates to move back down in order to refinance you might very well be out of luck, at least for the short term. More importantly, if you’re thinking of buying a home you have to take into consideration higher mortgage rates are ahead and home prices see no signs of pulling back. That means today your buying power is stronger than it will be as the year progresses.
If you’re even thinking of selling your home and buying another or you’re wondering if you’d like to join the first-time-homebuyer club, it’s probably a good time to speak with a loan officer about monthly payments, closing costs and down payment requirements. If you wait until the spring or summer, you’ll very likely see that home you’ve been looking at either sold or listed at a higher price.