Dear friends and clients,
It’s no secret that buying can be tough in this market. Interest rates are increasing at a faster pace than they have in decades, the lack of inventory has driven home values up, and inflation is making it even harder to buy.
The cost of ownership has increased dramatically over the last few months. If you’ve been looking for a home, you may have already noticed the impact of both rising prices and climbing rates on your budget. The only silver lining to this is that it has, as Mike Maher, co-founder and CEO of Houwzer, notes, “helped push some competition to the sidelines.”
You may be facing less competition, but home prices aren't likely to adjust anytime soon. Daryl Fairweather, the chief economist at Redfin, says, “It is hard to imagine prices going down, but I think we are nearing the end of the period where homes are going for $100,000 over asking price.” While home prices may continue to increase next year, Fairweather warns that they could decrease by 5% to 10% the following year nationally. If you buy a home soon, it’s important to choose a property you could imagine yourself living in for the next five years or so.
With all of these issues at play in the market, it’s a very challenging time to buy. However, there are a few things you can keep in mind to make the process easier:
1. Buy now. More interest rate hikes are on the horizon, so if you don’t buy now, homes may get even more expensive soon. On top of that, rent prices are rising faster than home prices in many areas, so buying sooner rather than later could help you avoid those costs.
2. Expand your search. With decreased home affordability, you may want to reassess both the size and location of your new home. Searching for smaller houses or looking at properties in less expensive areas might help you offset increased costs.
3. Improve your credit score. Qualifying for the best possible interest rate will keep your costs low. There are a few strategies you can use to improve your credit score if it’s not where you want it to be, such as paying down debts and correcting errors on your report, but you should talk with a lender first to see what the best solution is for your situation. If you don’t have a local lender in mind, we can refer you to an excellent one.
Prices and interest rates will continue to climb and make it even harder to get into a home. If you’re worried about finding your next house, don’t. As challenging as it may seem, it’s still possible to buy a great home in this market. We’d love to help you with your purchase.
If you’d like to take a look at what’s available on the market today, you can view our multiple listing service here:
If you have any questions or would like to get started on the buying process, please call us at 512-829-8000 or reply to this email. We would love to help with all your real estate needs.
Looking forward to hearing from you,
Looking to buy a home? Looking to sell a home?