If you put off your home search at any point over the past two years, you may want to consider picking it back up based on today’s housing market conditions. Recent data shows the supply of homes for sale is increasing, giving buyers like you additional options.
In New York City the “30-day pace of Deal Volume is stabilizing in the mid-800s”. Urban Digs “suggests that perhaps the peak fear of this cycle down was during late June and early July, and since, we have seen buyers narrowly step back into the market. This tells us that whatever shift we went through, we have arrived at where the market needed to go; for now. The market no longer seems to be actively falling.” But it’s important to keep in mind that while inventory is improving, it’s still a sellers’ market. And that means you need to be prepared as you set out on your home search.
Here are three tips for buying the home of your dreams today.
1. Understand How Mortgage Rates Impact Your Homebuying Power
Mortgage rates have increased significantly this year, and over the past few weeks, they’ve been fluctuating quite a bit. It’s important to stay up to date on what’s happening with rates and understand how they can impact your purchasing power when you’re thinking of buying a home. The chart below can help.
Let’s say your budget allows for a monthly mortgage payment in the $2,100-$2,200 range. The green in the chart indicates a payment within or below that range, while the red is a payment that exceeds it.
As the chart shows, even a small change in mortgage rates can have a big impact on your monthly payments. If rates rise, you could exceed your budget unless you pursue a lower home loan amount. If rates fall, your purchasing power may increase, which could give you additional options for your search.
2. Be Open to Exploring Different Options During Your Search
The supply of homes for sale is improving, which gives you more homes to choose from. But historically, supply is still low. That means as you search for homes, if you still don’t find something that meets your needs, it may be worth expanding your search.
A recent article from the Washington Post highlights a few things buyers can consider today. It encourages opening yourself up to more areas. For example, if there’s a location you’ve previously ruled out (like a particular town, for example) it may be worth taking another look.
And if you’re able to, opening your search up to include other housing types, like newly built homes, condominiums, or townhomes can further increase your pool of options. Even as the inventory of homes for sale improves today, finding ways to cast a wider net during your search could help you find a hidden gem.
3. Work with a Local Real Estate Professional for Expert Guidance
Ultimately, you need to be prepared when you set out to buy a home. Jeff Ostrowski, the Senior Mortgage Reporter for Bankrate, explains:
“Taking the leap to homeownership can provide a feeling of pride while boosting your long-term financial outlook, if you go in well-prepared and with your eyes open.”
No matter where you’re at in your homeownership journey, the best way to make sure you’re set up for success is to work with a real estate professional. If you’re just starting your search, a real estate professional can help you understand your local market and search for available homes. And when it’s time to make an offer, they’ll be an expert advisor and negotiator to help yours stand out above the rest.
Strategically planning your home search by understanding today’s mortgage rates, casting a wide net, and building a team of experts can be the keys to finding the home of your dreams.
Buyers this is the environment you have been waiting for. As Urban Digs reports “While the shift down may not have been as deep or violent as other outside housing markets, it’s important to understand the deflationary forces kept NYC real estate from seeing parabolic price rises over the last three years. It simply did not happen here. Add in declining supply, a soaring but peaking rental sector, and a reset of deal volume activity to the seasonal average, and that equates to a market that has found its new level – we are no longer actively falling.
That’s the key takeaway to understand. The best deals come when deal volume declines, the problem is we declined from 50% above averages to the average itself. In other words, this market is not dead by any means, so either you use the leverage advantage the market is currently offering you, or you don’t. Since the move happened, we must adjust our biases. Now we must wait for new market signals and macro triggers to tell us where we go from here. Until then, this is where we are.
Besides the three tips for buying a home above let me know if you have further questions. To make sure you have expert advice each step of the way, let’s connect.
Other educational articles about the market and your home search of interest are located under Karen’s Blog Articles.