The 2015 real estate market saw low interest rates and a healthy supply of homes for new buyers. MLS reported a 9% increase in sales. In 2016, Wake County taxes are set to increase as well as home interest rates, but that should not deter serious home buyers from seeking out new real estate investments.
Wake County Tax and Interest Rates Will Rise
Wake County’s octennial tax reassessment goes into effect in 2016, raising property value and mortgage prices across the county. The Federal Reserve is also anticipated to raise fixed-rate 30-year mortgage rates to 4.2% (from its current 3.92%) by the end of 2016 due to the increase in job availability and economic growth.
Fortunately, both mortgage interest and property taxes are tax deductible every year for homeowners. You can calculate your monthly mortgage payments, as well as find out information about local lenders and mortgage prequalification, on our mortgage information page.
Advice for Closing on a Home Placed Under Contract in 2015
If you are in the middle of a home purchase and have not locked in your interest rate with your mortgage company or checked the new property tax liability against your qualification ratios, you may want to call your lender ASAP.
Mortgage payments are broken down into (PITI) — the Principle down payment, Interest from the lender, property Taxes, and Homeowner’s Insurance. If less than a 20% down payment is made, private mortgage insurance could apply depending upon loan type. Many mortgage programs require the PITI to be less than or equal to 28% of the borrower’s monthly income. If you barely qualified (say at 27%), the increase in property tax could disqualify you for eligibility.
Locked interest rates hold for an average of 60 days, giving you enough time to close without complications.
Outlook for the 2016 Wake County Housing Market
Despite the tax variance and increased interest rates in 2016, the housing market in the Triangle and Wake County looks to remain similar to 2015.
- Luxury homes valued at $700,000 and above will continue to be buyer’s market, supply exceeds demand and an influx of new construction will place more price pressure on re-sales.
- Homes valued from $400,000 to $700,000 will be steady with balanced supply and demand.
- Homes $400,000 and below will continue to be seller’s market as properties in this range are in high demand and sell quickly.
Choose Linda Craft & Team, Realtors
Although rates are rising, it is a sign that the economy is doing much better than it has in previous years. The real estate market is stable and finding the home of your dreams will continue to be a solid investment for your future.
When you are ready to take the next step in purchasing a new home, let our experts at Linda Craft & Team, Realtors guide your way. As a team, we are able to fully assist you with all of your real rstate needs, 24 hours a day. Our efforts over the past 30 years have made us the #1 real estate team in the Triangle!
Contact us today at (919) 235-0007 and learn what home buying resources and services we can offer you.