With inflation on the rise, the stock market in a downturn and housing prices continuing to increase, it can be a confusing time for people in the market to buy a new home. Whether you are coming off of a sale of a property or looking to get into home ownership for the first time, there are many factors to consider in making such a large purchase. Take a look at our buyer’s guide to make sure that you have the tools to make the decision possible in regard to finding the perfect home this summer!
- Boom or Bubble?: After the last housing market crash, buyers are right to wonder if this most recent spike in home values will hold and if it makes sense to wait to buy instead. Unfortunately for optimistic buyers, housing supply is still not keeping up with demand for homes, so even though home prices should level off as the year continues, they are unlikely to drop in the near future. So, if you are prepared to buy a home, it’s prudent to find the home you like and purchase it now.
- Financing Forecast: Unless you are planning on buying your new home with cash, another important factor to consider is the direction that mortgage financing is going. With inflation on the rise, the Federal Reserve has already increased interest rates and is forecasted to make further increases this year. What this means for you is that you can expect the rate of your mortgage to increase the longer you wait to secure financing for a home. This isn’t all bad news though! As higher rates push investors out of the market, you could see less competition for your dream house.
- Put Your Best Offer Forward: In a seller’s market, pretty much regardless of where you are trying to relocate to, sellers are receiving multiple offers that are at, or over, their asking price so make sure that you come prepared with your best offer if you find a home that fits your needs. You are unlikely to get a counter offer from a seller in the current market and could very well put yourself out of the running for your ideal home if you don’t put your best offer on the table to begin with.
- Be Flexible, To A Point: In a competitive and frustrating buyer’s market, it is important to be ready to be flexible with your offer. Unlike in a buyer’s market where you can insist on certain upgrades and fixes before purchase, making demands like that could be the difference that puts you out of the running for a home you really want. Although, it makes sense to take on small improvements yourself to give your offer a bump, make sure that you don’t go too far and that you still insist on inspections. Don’t get caught up in competition and end up on the hook for expensive issues like roof or AC issues.
- Personalize Your Offer: Especially in a market as competitive as the current housing market. The smallest details can impact whether you have a successful home bid or whether you have to go back to the drawing board and look for another place that fits your needs. One often overlooked strategy in submitting an offer is writing a letter to the current homeowners that tells what you love about their home and why it will fit the needs of you and your family. Although, not always effective, a personal appeal to someone else selling their family home could give you a leg up against investors with less personal plans to gain from the home you are bidding on.