House hunting can be overwhelming, especially if you’re a first time buyer. It’s exciting and exhausting at the same time. How do you even know where to start in the process? If you;
Historic Mortgage Rates Make Housing Market Jump
If Springtime means searching for a new home...be prepared. It's a great time because rates are at historic lows, but be ready to fight. Bidding wars are extremely likely not only because of the low mortgage rates, but the demand is strong and the amount of homes for sale is down. And get ready to pay premium...fewer homes coupled with high demand means higher prices. It is still the sellers market.
Falling home loan rates have boosted mortgage applications, a sign the housing market may help the economy stave off a recession, reported Sam Khater, Freddie Mac’s chief economist. Housing market potential increased 1.4% in January 2020 relative to the previous month, and grew 4.7% year over year, the highest rate of yearly growth since December 2017. Actual existing-home sales exceeded housing market potential by 1%. Given these strong indicators in rates and sales, as well as recent increases in new construction, it’s clear the housing market continues to be a positive force for the economy.
In addition to making home purchases more affordable as we enter the spring selling season, falling rates are spurring more Americans to refinance, according to the Mortgage Bankers Association. That will lower their monthly bills and give them more money for the consumer spending that accounts for about 70% of the U.S. economy. The most significant hindrance to future potential sales is the housing market’s lack of inventory. The same dynamic that’s making home more affordable is preventing more supply from entering the market. Persistently low mortgage rates can discourage existing homeowners from selling.
Here are some tips for the buyers and sellers to keep in mind:
- Don't give up! Be patient! You may have to bid on several properties before you beat otu the competition for that home.
- Work with a broker! A local realtor will know how to sweeten the pot for that potential seller and make your offer the most attractive.
- Go the extra mile! Consider writing the seller a letter. It doesn't cost the buyer anything to write a nice letter about how much they like the home. But other financial incentives, like having an all-cash offer, shortening the escrow terms, waiving contingencies and offering more money help too!
- Spruce it up! Even in this tight inventory environment, homebuyers' expectations have risen.
- Don't get greedy! An overpriced home is still going to sit on the market. With the right price, you're likely to get a bidding war.
- Know where you're moving before you hand over the keys! Have a plan for what you will do after you sell your home.
And when you are ready...call us!
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