‘Tis the season — not just for exchanging gifts and holding festive get-togethers, but also for scoring a great deal on a new home.
Source: Diane Guariglia
In the market for a new home? Here are four reasons to add real estate shopping to your December to-do list.
Did you know that, historically, home prices are lower in December than in any other month?
As for the overall housing picture, if you’re not yet in the market, you’ll like this news: While home prices are continuing to rise, it’s happening at a much slower pace.
According to a recent report from Zillow, U.S. home values are currently up 6.4 percent year-over-year and have been slowing for nearly two years. Next year home values are expected to grow at 3 percent — roughly half their current pace. These changing dynamics, and a shift toward healthy stabilization, put more power in the hands of buyers.
Low mortgage rates
What’s driving affordability? Low mortgage rates. Currently hovering in the 4 percent range, rates are projected to edge up to 5 percent by the end of 2015, according to Zillow Chief Economist, Stan Humphries.
To put this in perspective, did you know that if rates go up by just one percentage point, your purchasing power is reduced by a whopping 11 percent? Find out how much waiting to buy could cost you.
If sellers are listing their home for sale this time of year, this likely means they’re serious about shedding the weight of their residences.
Regardless of why that is – perhaps they’ve recently gotten divorced, have to relocate for a new job opportunity, or are under some other personal pressure – this puts you, the buyer, in a much better position to negotiate and ultimately cut a deal, particularly since competition is minimal this time of year.
At the end of the year, everyone is looking for ways to lower their tax bill. And closing on your new home before Dec. 31st is one way to get some breaks.
After all, you can deduct home purchase costs, including mortgage interest, property taxes and points — while you build equity and save yourself a significant amount of money.
Written By: Vera Gibbons
Vera Gibbons is a financial journalist based in New York City and is a contributor to Zillow Blog. Connect with her at VeraGibbons.com/.