If you have been thinking of selling your home, now may be the right time to enter the market. A couple of real estate trade journals recently reported the following:
- There are Trump and Republican House plans to double, or more, the standard income tax deduction somewhere between $24,000 and $30,000. This will make itemizing mortgage interest as a deduction unattractive to more than 8 in 10 tax filers. While a lot of higher-end home owners will still itemize, and still get a subsidy for mortgage borrowing, overall house prices would take a hit. A Federal Reserve study from 2016 estimated that removing all mortgage interest deductions would send house prices 7 percent lower.
2. With two predicted 25-basis-point rate hikes from the Federal Reserve likely this year, and three or more not out of the question, it looks like quite a few fence-sitters will fall backwards into the rental market rather than jump down to make a home purchase.
3. Millennials, America’s largest generation, already saddled with record-breaking student loan debt, no longer think homeownership is in their future. A survey from the NHP Foundation, a non-profit organization that supports affordable housing, stated that 69% of millennials are “cost burdened” due to affordability constraints and debt. Another statistic from the survey showed half preferred to rent due to the cost of owning.
4. Immigration restrictions on home buying continues to effect local markets including Seattle and Vancouver,BC.
Home prices are good now. This much we know. The future is uncertain and there are indicators suggesting prices may fall. If your home is currently worth $500,000, a 7% decrease would reduce it to $465,000. This won’t happen overnight of course, however, getting a home ready for the market does take time. Deciding where to move, making necessary repairs and updates, and choosing a Realtor could be a lengthy process. If you are thinking of selling, now is the perfect time to contact us to discuss your options.