“Here are two factors every buyer should keep their eyes on.”
To succeed as a buyer in today’s market, it’s important to understand which market trends will have the greatest impact on your home search. Danielle Hale, Chief Economist at realtor.com, says there are two factors every buyer should keep their eyes on:
“Going forward, the conditions buyers face are primarily dependent on two things: mortgage rates and housing supply.”
Here’s a look at each one.
Mortgage Rates Projected To Rise in 2022
As a buyer, your interest rate directly impacts how much you’ll pay on your monthly mortgage when you purchase a home. Rates are beginning to rise, and experts forecast they’ll continue going up in 2022 (see graph below):As the graph shows, mortgage rates are expected to climb next year. But they’re still low when you compare to where they were just a few years ago. That presents today’s buyers with some motivation to lock in a low mortgage rate before they climb higher.
More Homes Are Expected To Be Available This Season
The other market condition buyers need to monitor is the number of homes available for sale today. The latest Existing Home Sales Report from the National Association of Realtors (NAR) shows the current supply of inventory sits at just 2.4-months. To put that into perspective, a 6-month supply is ideal for a balanced market where there are enough homes to meet buyer demand.
However, there may be good news for buyers who are waiting for more options. A recent realtor.com survey shows more sellers are planning to list their homes this winter, meaning more choices will likely be available soon.
What Does That Mean for You?
Even if your options improve some this season, it won’t significantly shift market conditions overnight. According to NAR, many more listings need to be available to move closer to a more neutral market:
“Given the average monthly demand . . . , 3.55 million homes should be on the market to meet a level of inventory equal to six months of demand, implying a shortage of homes for sale of 2.24 million.”
So remember, even with more homes expected to come to market this season, competition among buyers will remain fierce as there still won’t be enough homes for sale to meet the current demand. That means you’ll need to act quickly when you’re ready to make an offer.
Bottom Line
If you’re planning on buying a home this winter, more options are welcome news, but it doesn’t mean you should slow down. Let’s connect today so you have an expert on your side to help act as quickly as possible when the right home for you hits the market.
To view original article, visit Keeping Current Matters.
Are More Homes Coming onto the Market?
If you’ve been putting off selling your house, now may be the sweet spot to make your move. The longer you wait, the more competition you’ll have.
Why Is Housing Inventory So Low?
The shortage of inventory isn’t just a today problem. It’s been a challenge for years. Let’s take a look what contributed this limited supply
What Experts Project for Home Prices Over the Next 5 Years
Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth.
Planning to Retire? Your Equity Can Help You Make a Move
Whether you’re looking to downsize, relocate to a dream destination, or move closer to friends or loved ones, equity in your home may help.
Expert Home Price Forecasts Revised Up for 2023
As activity slows again at the end of the year, home price growth will slow too. This doesn’t mean prices are falling.
Buyer Traffic Is Still Stronger than the Norm
Buyers will always need to buy, and those who can afford to move at today’s rates are going to do so.