why buy your house today


                                                                                   Why buy your house today

                                                                                       The result in 30 years

                                                $300.000                                                                              $300.000

                                                      5%                                                                                              3%

                                                  $1,800                                                                                      $1,200

                                                 The difference between this year and next year $124,200

        Will 2020 be a good year to buy a home? Here’s what the experts say

Economists say that 2020 will be a positive — though not exactly stellar — year for the housing market. And that could be good news for renters and home buyers alike.
But that’s assuming experts’ forecasts are right.
“If interest rates go up 100 basis points, we’ll be off,” Doug Duncan, chief economist at Fannie 
FNMA, -0.44% said. “When you sign on the bottom line your willingness to be a forecaster, that’s what you’re signing up for.”
If the past year is any indication, predicting the housing market’s trajectory a year or more out can be something of a fool’s errand. At this point in 2018, mortgage rates had just hit their highest level in years and seemed poised to crack the 5% threshold in 2019.

Mortgage rates should stay below 4%, but don’t expect them to decrease much

The vast majority of housing economists project that mortgage rates will remain below 4% in 2020.

The Federal Reserve has indicated that it will be in a holding pattern for the foreseeable future. While the Fed’s view on the state of the U.S. economy has improved since it cut rates back in October, Chairman Jerome Powell signaled that the central bank will not hike rates until there is a sustained increase in inflation. (While the Fed does not directly control interest rates for home loans, the mortgage market tends to price in the central bank’s expected moves.)

Further making an increase in interest rates unlikely is the fact that globally, central banks have been cutting rates rather than raising them, said Doug Duncan, chief economist at Fannie Mae. “That takes a while to work its way through the system,” he said, adding that “nobody is talking about tightening.”

Continued low mortgage rates would be good news for renters, according to Skylar Olsen, director of economic research at Zillow ZG, +3.57% . More people will be able to afford to buy a home if mortgage payments remain affordable – in turn reducing competition for rental units. “Low rates will encourage more renters to pursue homeownership, further boosting overall homeownership rates that have been on the rise since 2016,” Olsen wrote in her 2020 forecast

However, a potential trade deal between the U.S. and China presents some upside risk to rates. Were the two countries to ink a substantial deal early next year, markets could improve. That in turn could fuel increased inflation, which might prompt the Federal Reserve to hike rates as it attempted to do earlier in 2019. If that were to happen mortgage rates could go up — and depending on how much they increase, that could alter economists’ other projections.


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