If you’re a buyer in the current Tucson market, you’ll want to pay attention to the trends in home prices this coming year. If we have the same growth in the average sales price and home appreciation that we have had in the past 12 months:
- A house worth $200,000 now will cost roughly $225,000 in December of 2019.
- A house worth $400,000 now will be worth just under $450,000 at the end of this year.
- A $600,000 house will become a $675,000 house this December.
Another variable that will affect buyers significantly is the behavior of interest rates. If there is a 1% increase in interest rates:
- The monthly payment for a $200,000 house will increase by $119 per month.
- The monthly payment for a $400,000 house will increase by $238 per month.
- The monthly payment for a $600,000 house will increase by $357 per month.
As our economy heats up, the government becomes fearful of inflation. Their means of keeping inflation in check is to raise interest rates so as to slow the economy down; if we’re paying more for our money, we’ll spend less of it. And with the strength that we’re seeing in the economy, the stock market, and the housing market, it’s a safe assumption that we’ll have some upward pressure on interest rates this year. Buyers planning to purchase this year will likely be better off doing so earlier in the year rather than later.
If you have any questions about the future of the market or about buying or selling your home, feel free to reach out to me. I’d be glad to answer your questions and offer you guidance.