Wait to invest or move ahead now?

January 2019 Published by Leave your thoughts

Buy or wait? That is the question you may be asking yourself in 2019. But with rates poised to go higher, it may make sense to lock in soon if you can afford to purchase. Mortgage rate growth has shown some brief reprieve with rates dropping in very recent weeks, yet in the longer-term mortgage interest rates are expected to continue to climb making mortgage debt service, including hard money loan debt service, more expensive. However, that will be offset to some extent by downward pressure on home prices. Net-net investors and fix-and-flippers would be wise to consider purchasing sooner rather than later.

Forecasts predict conventional mortgage interest rates to make the average residential purchase 8% more expensive per month than in 2018. Another reason to jump on the right opportunity in the near-term.

2020 is expected to be the peak Millennial home buying year as the largest cohort of the generation will turn 30. Millennials are also likely to make up the largest share of homebuyers for the next decade as their housing needs adjust over time. Investing in the immediate term should position for an attractive exit to the Millennial population.

The medium and long-term prospects for investment residential real estate remain sound since demographics are going to continue to support demand. While investment returns may not be as high as in recent years, smart investors with a sharp eye to buying right and maintaining discipline around execution of rehab budgets should be beneficiaries of favorable profit margin in 2019.

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