If you’re looking to buy a home in the new year, some analysts say it’s better to do it sooner than later.
Near the end of 2016, the Austin-Round Rock metro area saw a notable spike in single-family home sales. In November, sales grew almost 16 percent, compared to the same month last year. Jim Gaines, chief economist at the Texas A&M Real Estate Center, said 2016 didn’t bring the same seasonal low we typically see around the end of the year.
“It’s still indicative that we have a pretty strong housing market, but because of the spread between November of ’16 to November ’15, we get this big percentage increase,” Gaines said.
Heading into 2017, Gaines said the recent interest rate hike is sure to be a key consideration for homebuyers. He said it will likely make some people nervous about borrowing, but it’s important to remember that the rate is rising from historic lows.
“Going into 2017, we’re going to see interest rates ranging probably from the low 4's to maybe the high 4's, and there’s reason to suspect that that’ll have a psychological impact more than an actual economic impact, just people think somehow, once it gets over 5, after it’s been in the 3's, that that’s just unreasonably high,” Gaines said.
He said the rate hike may come as a shock to many young people entering the housing market for the first time. They may opt to scale down instead of springing for a more expensive dream home. But, Gaines said, if you’re looking to buy in the Austin area, there’s no longer a good reason to wait.
“Prices, of course, are not going to come down,” he said. “Availability is, right now, the biggest issue. There simply is just such a limited supply, your problem is not going to be affordability. It’s going to be choice.”
Eldon Rude, principal of 360 Real Estate Analytics, said after four years of strong job growth in the region, there’s a lot of pent-up demand in the housing market, but he said it remains to be seen how long that trend can continue.
“The latest job numbers from the Workforce Commission show that we’re creating about half the jobs on an annual basis that we were for the last four years, so there are some signs that things might begin to slow a little bit,” Rude said. “We’ll have to see how those numbers play out as we move through the first part of 2017.”