Is the New Shifting Market Bad for First-Time Home Buyers?
We had been in a seller’s market for quite some time. All sellers had the upper hand, and most properties sold for more than advertised.
Today, it is no longer the case. Home inventories have decreased, and interest rates have risen dramatically. Is this good or bad for buyers?
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For the time being, it is beneficial to purchasers – here’s why.
Housing Demand in a Shifting Market
For starters, there is far less demand. You couldn’t wait for more than a day or two to see a property after it was listed or under contract this time last year. Furthermore, the property was under contract for significantly more than the asking price, and the buyers were waiving appraisal conditions.
This is no longer the case. Because there are fewer buyers in the market due to higher interest rates, buyers have a greater opportunity to look at more properties and bid what they want on a property rather than what other buyers are pressuring them to bid.
First Time Home Buyers Should Look for Reasonable Home Sellers in a Shifting Market
Last year’s selling frenzy drove vendors insane. They weren’t taking bids that were even a cent lower than their asking price, and the majority of them were hanging out for the largest bid over their asking price.
That’s understandable why they’d do it, but it’s not fair to buyers who invest in these properties, paying more than the house’s value in a few months.
In today’s market, sellers are much more eager to negotiate pricing and allow you to pay a fair amount for the house. You’re also not under any obligation to waive the appraisal contingency.
Tougher Affordability
Mortgage rates are one facet of the changing market that might be difficult for purchasers. They are at their highest in decades, with recent rates exceeding 6{fb1e1880c459e557ac3ce17ffa2de9d6b992aa91487d45f235782beb8d8c21f0}. Many purchasers may be priced out of the market as a result of this.
The good news is that you can browse around for the best rates, and you may even be able to manage your rate by mastering your qualifying elements.
Check your credit score before applying for a loan and address any difficulties you discover. Stabilize your income and save for a substantial down payment. Don’t show up with only the minimal necessities. Instead, demonstrate to lenders that you are a good risk and are serious about purchasing a house in today’s market.
Final Thoughts for First Time Home Buyers
The market is changing, but that isn’t necessarily a negative thing. Buyers couldn’t keep paying exorbitant housing prices without expecting the bubble to bust someday.
Prices will fall when things calm down, and consumers will have more alternatives. Sellers may have to wait longer for their properties to sell, but it won’t seem as frantic. Instead, it will feel like a more casual procedure in which everyone can receive what they want out of the real estate deal.
If you’re ready to look at houses on the market now, call me today and let me help you locate the ideal home.
Should First Time Home Buyers Consider Purchasing Property in a Downturn?
Recessions frequently drive purchasers out of the market, but this does not always indicate that it is a terrible time to buy. Indeed, we believe, that if you can afford it, a recession might be a wonderful time to buy a property. “Some individuals delay purchasing when this occurs, but I believe this is a mistake. When interest rates rise and demand falls, buyers may generally get a better price on the property they desire. Every buyer’s situation is different which is why you need a really good real estate agent and lending partner to make sense of all the chaos.Â
Whether or not the US is officially in a recession, we believe the conditions are still favorable for homebuyers to act in the coming months. “Between rising mortgage rates and what I believe to be a leveling out of home prices, potential purchasers may get a bit more bang for their buck in the coming six to 12 months than they have so far in 2022.”
Even with the current economic conditions certain markets are still strong. For example, the Sugar Land Housing Market is extremely strong and home prices continue to rise and sale are still relatively strong despite the increase in interest rates.
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