Crucial Reasons You Should Buy a Home Before 2017 Ends

Buying a house in 2017 will feel kind of like you’ve jumped onto the subway just as the doors were closing. Your heart’s pounding and you’re winded from the race, but you made it—just in time.

OK, so maybe that’s a little exaggerated. But here’s the thing: Interest rates have begun to rise and will likely climb higher. Inventory is low and could shrink more. And home prices? Well, home prices are increasing—and they’re not predicted to fall anytime soon.

If you don’t jump aboard the real estate train now, you might be too late.

If you waiting to buy, then you’re gambling that the market will be better for you to purchase in the future but that’s not a smart gamble. If you’ve been toying with the idea of buying, or you anticipate a life change that might force you to move—such as a new baby or a job transfer—you should be buying as urgently and as soon as possible.

So finish reading this, then start looking for a house. Here’s why.

Home prices are still rising

Real estate prices continued to grow steadily according to the latest instalment of Reserve Bank of India’s House Price Index (HPI).

While the overall index sequentially rose 2.2% at the end of December 2016, almost seven of the ten cities tracked by RBI saw the increase in price last year.

The House Price Index, that measures price levels across the nation, rose to 240.2 in December, from 234.9 in the September quarter.The annual growth in all-India HPI increased by 60 basis points to 8.3%, however, it remained lower than 9.7% annual growth recorded a year ago.

“All the metro cities witnessed housing price-rise on Y-o-Y basis, though Chennai witnessed some moderation during the latest two quarters,” the RBI said.

Better Mortgage rate

At the moment, we are witnessing a rate war on the Rs13 trillion home loan market. A rate war per se is not new but there are quite a few new dimensions in this round.

  •  Almost every lender has joined it either through cutting rates or tweaking the products.
  • This is driven by liquidity as every bank is flooded with money following the so-called demonetization exercise in which Rs1000 and Rs500 notes which accounted for 86% of the currency in circulation are being replaced. Banks’ year-on-year deposit growth, which was 9.8% till October-end jumped to 14.7% in the third week of January.
  • Finally, along with the expansion of the market, lenders are poaching each other’s customers freely as there is no prepayment penalty for the customers. The only cost a borrower incurs is the so-called memorandum of deposit charges payable to the state government. This could vary between 0.2% and 0.5% of the loan amount being transferred.

SBI made the first move by cutting its one-year marginal cost of funds based lending rate or MCLR—the anchor for all loans—by a massive 0.9% to 8%. It is now offering loans for home loans up to Rs75 lakh at 8.65%; for women borrowers, it is 8.6%. For loans above Rs75 lakh, the rate is 8.7% for men and 8.65% for women.

 

Leave a Reply

Your email address will not be published. Required fields are marked *