Global stock markets have been jittery in early 2016, rousting economic bears from their caves. From crashing oil prices, to economic slowdowns in China, to plunging U.S. stock values, it seems the sky is falling on Wall Street. CNN Money’s “Fear and Greed” index is pointing a pessimistic needle deep into “Fear” territory.
Should stock market volatility concern Columbus home buyers? Unless you’re counting on stock profits to cover your down payment, the short answer is “no.” These points from a recent MarketWatch article will help explain why!
1. Federal confidence in the economy. Just a few weeks ago, the Federal Reserve raised its benchmark rate by 0.25 basis points, the first uptick in nearly 10 years. The increase in the cost of money reflects confidence in U.S. economic fundamentals, such as employment strength and consumer spending.
The move by the Fed will be echoed in slightly-higher mortgage interest rates this year, but the increases are expected to be modest. Mortgage interest rates will remain very reasonable throughout 2016.
2. No bubbles to pop. Prior to the Great Recession, housing prices skyrocketed, fueled by speculation, easy credit, and a perfect storm of reckless optimism by home buyers, builders and lenders alike. After the housing market crash, the industry returned to conservative lending and appraisal practices. Home buyers have been exhaustively vetted during the past several years.
The gains in home prices of recent years reflect the dynamics of supply and demand, in line with local economic conditions. This doesn’t mean that some homes aren’t a bit overpriced; but this is not the same thing as a wide, speculation-driven bubble.
3. Employment gains. During the past 5 years, national employment numbers have been steadily improving. Job growth in 2015 is estimated at 2.5 million, and 2014 job growth came in at 3.1 million. Unemployment has fallen to pre-recession levels.
Here in Metro Columbus, we have a number of good things going for us. According to the Federal Reserve Bank of Cleveland, we have the strongest economy in Ohio. Our unemployment levels are less than 4%, well below the national average. Business growth has been healthy. At the same time, gains in home prices have been gradual, sponsored by increased demand in the face of limited inventory.
Such is the demand for housing in Central Ohio, that apartment vacancies are hitting a 16-year low, according to Columbus Business First.
To sum it up, stock market fluctuations are a fact of modern life. Free-market economies will always have ups and downs. When preparing for home ownership, it’s best to evaluate your personal housing needs, long-term goals and economic abilities. The right time to buy a home, is when it’s the right time for you.
Planning for home ownership? As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.
Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!
Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!
Andrew Show
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax
