POST TAGSMortgage News
Blog posted On July 19, 2022
2022 has been a whirlwind for the housing market. Mortgage rates have been steadily climbing since the beginning of the year, inflation has hit a 40-year high, and home prices are soaring. But it’s not all bad news. In fact, several market conditions are beginning to shift in favor of home buyers.
Danielle Hale, chief economist at Realtor.com, shed some light with four things buyers should know about the current housing market.
“Our June Housing Trends Report shows that housing inventory has made the biggest about-face ever in a one-year period of time, rising 18.7% over this time last year,” says Hale. As inventory increases, it’s likely that prices will be forced lower, and buyers will have more options on the market.
One in seven homes had a price cut in June. This is up from one in thirteen in June 2021. In most areas, sellers can no longer expect buyers to overbid by hundreds of thousands of dollars. “In short, the national market is resetting,” says Hale. As demand cools and more existing homes are available on the market, you likely have a better chance at finding the home you want and facing less competition for it.
Hale suggests following the local data in the area you want to buy. This can help you prepare better. Oftentimes, the best strategy is to hire a local real estate agent. This is especially useful if you’re moving to a completely new area. “That will help [you] set more realistic expectations and keep up with trends that are evolving, in some respects in a more favorable direction for buyers,” says Hale.
Regardless of what’s going on in the market, it has to be the right time for you to buy. Even if it’s a ‘buyer’s market,’ it still could be a bad time to buy if you’re not financially prepared. “Before you start shopping, take a hard look at your budget and figure out what you’re comfortable spending on housing each month,” says Hale. A general rule of thumb is that you should spend “no more than 28% of your income on housing payments and no more than 36% to 50% on total debt payments, including housing, student loans and car loans,” Hale advises. A great tool that can help you determine your financial preparedness is our mortgage calculator.
There are several encouraging signs for buyers right now. Let us know if you want to explore your options or learn more about current market trends.