Brutal Housing Market
- 30 year mortgage rate jumps to 4.67% with 5% in sight
This housing market is painful. I thought I'd share a few things you may want to keep in mind and pass along to others with interest rates on the rise.
If you’re looking to buy a house:
- Similar to last spring, low inventory and high demand will create a strong seller’s market, but it won’t be quite as intense as in 2021. Instead of a 20% hike in prices, you can expect appreciation to hover around 5%-6%.
- You may still face bidding wars, but the good news is they aren’t likely to be as intense or frequent as more homes come on the market this spring.
- However, you still need to head into the process with a hefty helping of patience and an open mind. The last thing you want to do is panic buy and end up with a home you and your budget regrets. That said, consider all your options (single-family, townhome, condo, new construction) even if it’s a deviation from what you initially set out to purchase.
- Mortgage rates jumped in early 2022 to an average of 4.67% by the beginning of April. Most housing experts agree rates will continue to inch upwards due to inflation, Federal Reserve tapering, and the war in Ukraine. That said, it’s essential to prepare now for buying a home. If you haven’t already, get pre-approved by a trusted mortgage lender.
If you’re looking to sell a house:
- As mentioned above, this spring will be a strong seller’s market; however, you’ll need to keep both feet on the ground. Compared to 2021, you’re less likely to see a fierce bidding war drive up your sale price.
- The sooner you can get your home on the market, the better. Sellers on the front end of the spring selling season are more likely to see their homes sell quickly as inventory hasn’t had time to build up. The further we get into the spring and summer, the more homes buyers will have to choose from.
- Go ahead and prep your home for the market. Schedule any repairs or upgrades ASAP since things are taking longer to complete due to supply and labor shortages.
- Expect housing prices to remain elevated and the cost of borrowing to rise.
- Demand will remain strong
- Patience is a virtue
- Inflation is persistent