Are you wondering if now is the right time to buy or sell a house? With mortgage rates at their highest level in over 20 years, it may seem like it's best to wait. But there are other developments that might make jumping into the real estate market a good move.
Read on to learn about the latest real estate trends!
Home Prices Continue to Rise
Home prices started soaring in 2020, creating a sellers' market. Anyone trying to purchase an investment property for a good price found themselves in a bidding war. Unfortunately, the real estate market has not changed significantly since then.
The good news for buyers is that the number of real estate transactions has gone down. This means that houses are sitting on the market for longer stretches in most regions.
Potential buyers will pay more for a home than they would have five years ago. But they will have a little more time to decide if a home is the right fit before making an offer.
Cash Buyers Have an Edge
As a prospective homebuyer, you can use bank financing and a lower down payment to ease the financial burden. But you will probably be edged out by a cash buyer when you make an offer.
Cash buyers constitute one-third of all home buyers today. If you're a potential home buyer and can make a cash offer work, you'll give yourself a better chance of having your offer accepted.
Mortgage Rates Will Fluctuate
If you're hoping the record-low mortgage rates of 2021 will come back, don't count on it. With the rates approaching 8%, you'll need to be prepared for the extra financial investment as a buyer.
The Federal Open Market Committee has been trying to curb inflation. And their actions have a direct impact on mortgage rates. As a result, individuals looking to buy will need to be patient and attentive to changes.
Interest rates have hovered around 6% or higher for the past year. Buyers will need to take a financial hit if they're forced to buy on a specific timeline. Otherwise, buyers might be better off waiting.
Inventory Remains Low
While investing in better curb appeal and interior updates used to be essential steps when selling a house, that's not the case anymore. Given the low inventory of available properties, sellers aren't facing as much competition.
Inventory is low for several reasons. Some potential sellers are holding off until mortgage interest rates seem more reasonable. After all, they may be buying homes, too.
On a positive note, new construction is booming. Buyers looking for a completely updated home may have an easier time finding one. Unfortunately, they are likely to pay more for a new construction home.
Understand the Current Real Estate Trends
Being aware of real estate trends can help you make more informed decisions as a buyer or seller. Inventory remains low, while home prices have continued to climb. And with higher mortgage interest rates, buyers will need to be confident about a property when they're ready to make an offer.
If you need help deciding whether you should add to your real estate portfolio, contact PMI!