After several magnificent boom years, signs of a slowing market are appearing in many areas. But to most economists, this just represents a return to a more “normal” housing market. It is an eagerly awaited shift for many buyers whose dream of home ownership was frustrated by escalating prices and bidding wars. The inventory of homes for sale should grow in many markets, giving buyers a greater range of choices. Because homes will take longer to sell, buyers won’t feel so pressured to make a quick decision or to waive contingencies in order to influence the seller.
Mortgage interest rates are still low compared to a hefty 18% in 1995. It is expected that interest rates will continue to climb this year with a slow, but steady, pace of increase. Fixed-rate mortgage loans should be a safer choice than adjustable rate loans in a climate of rising rates.
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