Is it a good time to buy a house? This is why buying now might make sense:
1. Mortgage rates are expected to moderate.
Rates may have hit their peak, some housing authorities say. If you’re a homebuyer, it’s a good idea to:
- Reach out to a mortgage expert to learn more about where rates may be heading. A skilled, local Loan Officer who knows your market can give you a better understanding of your ideal time to purchase. They can also explain which rate-lowering strategies—like a Temporary Buydown—might help.
- Put today’s mortgage rates into historical perspective. Though higher mortgage rates can seem troubling at face value, today’s rates are nowhere near as high as they were in decades past (especially the 1980s). Rates also remain below the historical average.
Mortgage rates are likely to moderate and potentially decline once the Fed gets a handle on inflation. Even small drops can make homebuying more affordable for many Americans, Nadia Evangelou, National Association of REALTORS® Senior Economist, says.
2. Housing prices are expected to keep rising.
Though we’ve seen some slight declines, home prices are still on the upswing. This is due to supply and demand. Housing inventory remains historically low and can’t satisfy buyer demand. Home values have been driven up as a result; appreciation in most areas is expected to continue. On top of that, rents also keep rising, motivating many first-time homebuyers to purchase and lock in a secure monthly payment.
The longer you wait to buy a house, the more it might cost you. But if you’re prepared to buy now, you can count on the fact that your home value is likely to increase, helping to build your prosperity once you become a homeowner.
3. More listings are coming.
You can hear frustrated homebuyers everywhere breathing a collective sigh of relief. Navigating the housing inventory shortage worsened by the pandemic hasn’t been easy. But relief is coming. Recent realtor.com® data shows that the number of homes for sale is up 48.3 percent compared to the year before.
While this is very welcome news, housing supply has a lot of catching up to do before we shift out of what’s considered a seller’s market. This summer, sellers may be more flexible in negotiating on price and agreeing to concessions. But homebuyers still need to be prepared to move quickly and put in a strong offer (ideally, one backed by an early approval program like Academy’s *Pre-Approval+).
Before you start shopping for your dream house: Find out how to gain certainty with *Pre-Approval+.
4. You could gain equity.
Equity is the amount owed on a mortgage subtracted from the current value of a house. Home equity can increase as you pay down your mortgage and as your home value appreciates.
So, how much could you stand to gain if you bought a house this summer?
- As a reference point, the average homeowner has seen their equity grow by $14,300 to $63,100** in the past 18 months.
- “While equity gains contracted in late 2022 due to home price declines in some regions, U.S. homeowners on average still have about $270,000 in equity, nearly $90,000 more than they had at the onset of the pandemic,” CoreLogic’s Homeowner Equity Insights report states.**
- Given that home prices are projected to keep appreciating, it would be fair to say that, within the next year, a new homeowner might see thousands of dollars in equity gains.
This is an ideal time to chat with your Loan Officer about the benefits of entering the market in light of the potential equity you could gain. Some homebuyers have purchased a condo as a starter home or a fixer-upper using an all-in-one Renovation Loan. While these choices aren’t for everyone, they can be helpful to certain buyers; ask your Academy Loan Officer about your options.
5. You’re ready to start your next chapter.
How much you pay for a home is influenced by today’s mortgage rate and a home’s price. If rates and prices weren’t a concern, would you buy now, or would you wait?
Answering this question can tell you more about your main motivators for becoming a homeowner. You might want to move into a new school district, relocate to a dream city, or find a home that has more room for pets or family. Now may be the time to move forward, instead of putting your dreams on hold.