Buying or selling a home can be overwhelming, even in a more favorable economy. Right now, with housing inventory still historically low, the increasing values of homes, and when interest rates are expected to rise yet again, both buyers and sellers are making quick decisions and are feeling extreme pressure. As the tension rises, it can be easy to overlook the end goal; right-sized home, relocation, dream home, etc. Try not to lose focus!
Facing a very tight inventory of available properties, buyers have been up against a lot of competition for the limited number of homes that hit the market. After touring homes, if any of the properties checks most of the boxes on their “must have” list, buyers must make a quick decision to put in a competitive offer. Buyers don’t often have the luxury of a second look or hesitation and often are competing against multiple offers, adding to the pressure.
However, there is some good news for buyers according to Nerdwallet, “The number of pre-owned homes for sale increased to 1.26 million in June, according to the NAR. At the current sales pace, it would take three months for all of these properties to sell, up from 2.6 months during the previous month and 2.5 months in June 2021.” Is this a sign the market is shifting? Time will only tell. But it definitely is a sign the market may be downshifting to a more normal pace and price structure.
Pair the low inventory and higher prices with rising interest rates, some buyers may think it is time to step out of the market and put off their new home dreams. This could be a regrettable decision. According to Investopedia, when investing in a home, important metrics to follow are home values and mortgage rates, but the best time to buy a house is when you can afford to. Attempting to time mortgage rates and home values is nearly impossible to predict.
When buying a home, the number one factor is the ability to afford a home without getting over your head. Mortgage interest rates are still remarkably low despite the recent interest rate increases, so now is a still a good time to purchase a home.
Sellers are also feeling the challenge of the frantic pace of the market caused by the low inventory. Never before have we experienced the large jump in home prices and the fierce competition from buyers causing many homes on the market to receive multiple offers, thereby driving the sales price above the asking price.
Homeowners today are still at a distinct advantage in the current market. Your home is an investment. The ultimate goal is to maximize the value of your investment – and today’s market conditions are still strongly favorable to sellers. “With continued supply shortages and high buyer demand, now is a good time to sell your home. And with interest rates on the rise, it may be better to sell sooner rather than later — if rates spike much more, some prospective buyers may retreat from home shopping.” (Bankrate)
Whether you are a buyer or a seller, or both, the bottom line in each case is to stay focused on the end goal. Why are you looking to buy or sell? Working with your agent, and relying on their experience, keep your eye on the prize and recognize that the goal will be worth the effort.