POST TAGSMortgage News
Blog posted On December 20, 2022
Still think it’s a bad time to buy? According to Mortgage Bankers Association, more buyers think it’s a good time to buy a house in recent weeks. While many are still sitting on the sidelines, the ones who are taking advantage now are reaping the benefits of lower-trending rates, seller concessions, and less competition than the hotter spring market.
Most of the year, buyers thought it was a bad time to buy
Affordability is most home buyers’ number one concern. And for the majority of the year, they’ve been drowning in continual waves of bad affordability news. Between high home prices, 40-year high inflation levels, and the highest rates in over a decade, 2022 has left buyers desperately searching for the light at the end of the tunnel.
Is affordability on the uptick?
Over the past two months, mortgage rates have dropped significantly. “After spiking to long term highs in October, the last two inflation reports combined to create the best winning streak [for rates] since the start of the pandemic,” writes COO Matthew Graham of Mortgage News Daily. On top of the inflation news, the Federal Reserve announced a smaller rate hike last Wednesday, solidifying a great week for rates.
Buyers are starting to see hope for the coming year
Mortgage application submissions for the purchase of a home increased 4% during the week ending 12/9. “The ongoing moderation in home-price growth, along with further declines in mortgage rates, may encourage more buyers to return to the market in the coming months,” notes Joel Kan, MBA’s Vice President and Deputy Chief Economist. Earlier this week, the National Association of Home Builders (NAHB) released their housing market sentiment index, which showed that builders are looking forward to more sales over the next six months. While rates aren’t set for a straight downward descent, it’s predicted that they will overall trend lower throughout next year as inflation continues to moderate. Home prices are also expected to continue their cooling trend in coming months. Consequently, buyer affordability is likely to tick back up.
Right now, the housing market is going through its typical cooling season. But when the weather warms up, so will buyer activity. More people will be competing for the same homes. An alternative could be exploring your construction financing options – especially while builders are less busy. If you’d like to learn more about our construction financing, let us know.
Source: MBA, MarketWatch, Mortgage News Daily