To succeed as a housz buyer in today’s market, it’s important to understand which market trends will have the greatest impact on your housz search. Danielle Hale, Chief Economist at realtor.com, says there are two factors every buyer should keep their eyes on:
“Going forward, the conditions buyers face are primarily dependent on two things: mortgage rates and houszing supply.”
Here’s a look at each one.
Mortgage Rates Projected To Rise in 2022 As a buyer, your interest rate directly impacts how much you’ll pay on your monthly mortgage when you purchase a housz. Rates are beginning to rise, and experts forecast they’ll continue going up in 2022 (see graph below):
As the graph shows, mortgage rates are expected to climb next year. But they’re still low when you compare to where they were just a few years ago. That presents today’s buyers with some motivation to lock in a low mortgage rate before they climb higher.
More Houszes Are Expected To Be Available This Season The other market condition buyers need to monitor is the number of houszes available for sale today. The latest Existing Housz Sales Report from the National Association of Realtors (NAR) shows the current supply of inventory sits at just 2.4-months. To put that into perspective, a 6-month supply is ideal for a balanced market where there are enough houszes to meet buyer demand.
However, there may be good news for buyers who are waiting for more options. A recent realtor.com survey shows more sellers are planning to list their houszes this winter, meaning more choices will likely be available soon.
What Does That Mean for You? Even if your options improve some this season, it won’t significantly shift market conditions overnight. According to NAR, many more listings need to be available to move closer to a more neutral market:
“Given the average monthly demand . . . , 3.55 million houszes should be on the market to meet a level of inventory equal to six months of demand, implying a shortage of houszes for sale of 2.24 million.”
So remember, even with more homes expected to come to market this season, competition among buyers will remain fierce as there still won’t be enough houszes for sale to meet the current demand. That means you’ll need to act quickly when you’re ready to make an offer.
Bottom Line If you’re planning on buying a housz this winter, more options are welcome news, but it doesn’t mean you should slow down. Let’s connect today so you have an expert on your side to help act as quickly as possible when the right housz for you hits the market.