Why It's Finally A Good Time To Be A Home Buyer
It’s been a difficult year for homebuyers. Between the high demand for homes, not enough homes coming on the market, and the competitive bidding wars, you or someone you know may have thought it was impossible to buy a home recently.
Fortunately, there has been a shift in the market, albeit slight. It’s as though the market cracked opened the door signaling to buyers that it’s safe to enter again.
For the first time all year, it’s becoming a good time to be a buyer.
Here are some reasons why.
More Inventory
According to a recent housing report, there are more homes on the market now than there have been all year.
The study, September Housing Report: Inventory Just Hit a 2021 High, Which Means More Choices for Fall BuyersThe U.S. by Realtor.com®, reports that the supply of for-sale homes reached a new 2021 high and buyers continued to see steady improvement in the number of active listings compared to earlier this year
Chief Economist for realtor dot com says "Put simply, [buyers have] more options than they've had all year.
Longer Days on Market
In September 2021, the Realtor.com® report says that homes sat on the market for slightly longer than during the hectic spring and summer months.
Homes are still selling fast, but not at the “feverish” pace earlier this year.
When homes stay on the market longer, even slightly, the number of bidding wars and/or the competitiveness during the bidding war eases.
Fewer Bidding Wars
As a result of this slight easing in the market, bidding wars are easing too. Bidding wars are at their lowest levels since last year.
Redfin released a report showing that the number of offers facing competition decreased from 74.3% in April 2021 to 58.8% in August, a low for 2021. As many people who have tried to buy a home recently know, the bidding wars on homes have been brutal over the past year. Now, home buyers today are facing less competition for the homes they’re trying to purchase. This will make the process both easier and less expensive.
Favorable Mortgage Rates
The interest rate on your mortgage plays a significant role in which houses you can afford. Generally, the lower the mortgage rate, the better since even a difference of just half of a percentage point can add up to tens of thousands of dollars over the life of the loan and hundreds of dollars per month difference in payment for the same-priced home. While your credit history plays a role in your mortgage rate, the broader market conditions are important, too.
Currently, mortgage rates have been rising in recent weeks but overall they’re still at historic lows.
As of the last week of October, the average mortgage rate on a 30-year fixed mortgage was 3.24% and on a 15-year fixed mortgage, the average was 2.49%. Freddie Mac, a leading mortgage lender and researcher, published a mortgage interest rate forecast recently that indicates the 30-yr rate will rise to 3.5% by the end of 2022. That might sound like a small jump but it can make a big difference when you’re dealing with hundreds of thousands of dollars.
So, interest rates rising right now is no reason to panic buy to “beat” rising rates, but something to factor in as time goes on.
What’s Going To Happen Next?
It’s important to note that housing market conditions are ever-changing. The slight softening of the market could be temporary or could be a sign of things to come.
Barring any personal timing reasons, it’s ideal to buy a home when mortgage rates are low and there is less competition.
This moment is the first time all year we are seeing a slight lean in the favor of buyers with the low rates, more inventory, longer days on the market, and fewer bidding wars. That’s why right now is a great time to buy a home, especially if you were outbid earlier this year, got frustrated, and put your purchase on hold or talked yourself out of it earlier this year.
If you or anyone you know has sat out from buying a home over the last year, now might be the time to jump back in and I’d love to help make it happen.