With average mortgage rates at 8% and home prices rising steadily, potential buyers might be tempted to wait until interest rate numbers decrease before taking action on purchasing their dream home. But this could prove unwise.
Will it be worth waiting for lower mortgage rates in 2024? Without intervention by the Fed, mortgage rates will likely increase relative to 2020. Will it be worthwhile waiting?
1. It’s a Buyer’s Market
As part of your home buying decision-making process, one key consideration should be whether or not you are purchasing in a buyer’s market. A buyer’s market arises when there is more housing inventory than buyers looking for properties; giving purchasers more leverage when negotiating with sellers.
An ideal buyer’s market is one in which prices are lower and it is easier to find a home that satisfies your requirements, making this an excellent time to make a move and be selective when searching for property.
An increasing housing market could be considered a buyer’s market due to various factors, including low job market growth, population expansion and high mortgage interest rates. If demand exceeds supply and bidding wars ensue, leading to higher sales prices of houses for sale in your area – the easiest way to determine this status would be reviewing inventory available for sale locally.
2. It’s a Seller’s Market
If homes on the market are being sold faster than they’re being listed, that indicates a seller’s market due to limited house supply versus high buyer demand.
If you are searching for a home in a seller’s market, make sure that you obtain your initial mortgage approval as early as possible in order to act quickly when an attractive property appears on the market. Don’t wait too long before making an offer or it could disappear off of the market before it reaches you!
An aggressive seller’s market may require you to be more accommodating when it comes to concessions. For instance, you might agree to cover closing costs or inspection report concessions in return for purchasing the home at its full value. But any requests should always be balanced against how much of a mortgage payment you’re comfortable making; make a prioritized list of concessions you are willing to accept before agreeing.
3. It’s a Buyer’s Market with a Refinance
As a homebuyer, you know the housing market can shift quickly in either direction. When buyers have the advantage, homes often sell quickly with bidding wars becoming commonplace. When this occurs, it’s essential that buyers come prepared with preapproval for their mortgage and concrete offers to secure themselves against competition from sellers.
Since the COVID-19 pandemic began, housing market conditions have favored sellers; low inventory levels combined with rising prices has driven prices up, leading to bidding wars. However, not everywhere is currently in favor of buyers; and that may change.
An individual in a buyer’s market benefits by having more options and being able to negotiate more effectively with home sellers for things such as concessions or repairs. A good indicator of whether you’re in a buyer’s market is by looking at how long homes remain on the market – this gives an indication of how many offers have come in and competition exists for each property on offer.
4. It’s a Seller’s Market with a Refinance
Home prices are affected by multiple factors, including mortgage interest rates. When rates are reduced, they attract more individuals into the market, increasing demand and thus driving up home prices and making homeownership less affordable.
Home prices can also increase as a result of local economic conditions, population growth or job market gains. Such changes can alter the supply of available homes on the market and turn it into a seller’s market.
In seller’s markets, it is critical to secure your mortgage rate early. That way, when you find your dream home quickly after finding it. For any questions regarding your best options or for assistance in selecting one from AmeriSave Mortgage’s offerings today!