If you have not noticed, or are just not paying attention, home prices are rising all across the country. Some areas are growing faster than others, such as San Francisco and Denver which are rising far faster than homes in Washington, D.C., New York and Cleveland which shocked me. (After living in Brooklyn for quite some time, I never thought that I would see any area out pace New York City’s housing cost.) However the top five areas of appreciation are Colorado, Nevada, Florida, Hawaii and Washington and they range from a 10.6 to 8.8 increases. Looking at the most populated metro areas in the U.S., home price increases were the greatest in San Francisco-Redwood City-South San Francisco, with an increase of 8.3% and the weakest in Allentown-Bethlehem-Easton, PA-NJ, where home prices fell -1.1%. 

Price gains are good news for us homeowners, however it is not so great for those looking to purchase for the first time. And it is definitely good news for the homeowners who have not taken advantage of HAMP or HARP and are still underwater and fighting to stay in their homes. (If you do not remember HAMP and HARP are the refinance programs created by the Obama Administration to assist homeowners with remaining in their homes.) Rising home prices have outpaced national wage averages and this hampers the first time home buyers as well. Although home prices have been rising, rental prices are as well. You will either pay more to rent or more to purchase, so your housing alternatives are rather limited if you are trying to escape rising housing costs.

Because the housing alternatives are so slim, I do not believe that a slight rise in interest rates (.5 point) will make much of a difference with homebuyers. But an overall increase of 1 to 2 points will have a negative effect on market growth. It will definitely curtail growth of home ownership within the “credit-risky” consumer group who also have difficulty saving for their “pre-paids”. (Remember your “pre-paids” are the items that you must pay for before you finalize the home that you have chosen. These are fees for your Credit Report, Ernest Money, Option Money, Inspection Fee and Appraisal Fee.) So before the market takes an interest hike, let’s get you qualified and into a home. Call Brian @ 832.767.9375 and together we can make your Dreams of homeownership a Reality!!