Should buyers wait for the market to settle before making a purchase?
This market is still crazy, and houses are still appreciating. Are we going to see things level out a little bit here in 2022?
My answer to that is I don’t know—we see all the crazy trends affecting the national market second-hand here in our local area. The one thing to keep in mind is that as long as there are buyers in the market, there’s always going to be competition for homes.
Beyond competition, buyers also need to factor in interest rates. Rates are creeping up a little bit, and the government is coming back full circle to stabilize the economy.
Let’s take a look at an example. Suppose you decided to purchase a $200,000 home; you started your search a year ago but got frustrated because you weren’t winning any competitive bids. Back then, your mortgage rate was 3.25%, meaning that your monthly payment would have been $870. Now that rates have crept up to around 3.5%, the monthly payment on that same house is around $898. That’s not too much of a bump, but when you get up to a 4% rate, your monthly payment becomes $954. That’s almost a $100 difference for a 0.75% rise in rates.
If you’re thinking that it’s better to wait until things settle, understand that they might not calm down for a long time. Given that we only have about 1.2 months of available supply in the MLS, the market will likely remain competitive for buyers for the foreseeable future.
That means you need to be prepared. Give us a call, and let us show you how to be a stronger buyer. You may lose one or two bids, but it’s a learning process, and there are things we can do to help you succeed. We hope to hear from you soon!