Should You Write a “Love Letter” to a Home Seller?
Dan S | Apr 26, 2022
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By Kelly K. on Jan 28, 2022
Since the arrival of the COVID-19 pandemic, the real estate market has proven to be a wild ride for buyers and sellers alike – from the cutthroat bidding wars to the all-time-low interest rates. A lot of would-be buyers are understandably nervous in early 2022 and are considering waiting for the market to cool down. But holding off on buying your new house might turn out not to be the best strategy.
The housing marketing outlook for 2022
According to U.S. News & World Report, housing experts predict the following trends to take shape this year:
“The inventory of available homes will remain tight, and rising prices will put pressure on affordability.
Interest rates will rise, but wage growth may help to provide a balance for buyers.
The rental market will see continued growth, but likely stabilize somewhat compared to the last two years.
There’s a lot of anticipation for new home construction, but when labor and supply issues [will] ease enough for homes to be completed is unclear.”
Housing prices aren’t guaranteed to drop
For potential buyers wondering if they should wait to see if home prices will drop before buying, these market insights shed some valuable light on why you should consider buying now. And while we can’t predict the future, current data shows the housing market isn’t going to dramatically cool anytime soon.
Although prices may stabilize a bit as material shortages and supply chain delays ease, forecasters can’t pinpoint when we’ll see those changes trickle down to the buyer level and impact housing prices.
The takeaway? If you’re ready to buy a home, and you’re financially prepared to do so, it’s important to consider the risks of waiting and the potential for housing costs to continue to rise in the coming months.
Responding to the question whether home buyers in tight housing markets (like Denver) should wait for prices to drop, Compass real estate agent Taylor Wilson says:
“As the old proverb states, ‘The best time to buy a home was 20 years ago. The second best time is today.’ On a macro level, housing relies on what all markets rely on: supply and demand. In Denver specifically, demand is strong for a variety of reasons. Denver is a top city for millennials to move to and they are the largest buying population. We are LESS expensive than many cities that buyers are moving from, so we are relatively inexpensive. I believe Denver has a long run of strong appreciation ahead of it. That said, waiting for prices to drop will leave many buyers priced out of the market."
Interests rates are rising
At the end of 2020 and early 2021, mortgage interest rates hit historic lows. However, these record lows are no longer a reality, as interest rates have already begun to rise. Gay Cororation, Senior economist of the National Association of Realtors (NAR) shares, “Mortgage rates are expected to slightly move up, to an average of about 3.5 percent.”
David Keyte, Team Lead and real estate broker with Bend Relo at West + Main, in Oregon, had this advice for buyers in 2022:
“While there is always a risk of a price correction, if a buyer is comfortable with their monthly payment and the home meets their needs, there aren’t many strong arguments to delay. Each month people delayed in 2021, they saw their purchasing power erode by 1%-10%. We all have an embedded cost of housing, whether it’s rent or a mortgage. Speculating on trying to time a market correction has caused painful losses over the last decade. With inventory at all time lows, we are advising our clients to lock in the low rates and get into something they love."
If you’ve done your research, crunched the numbers, and are financially prepared to shop the housing market, the first half of 2022 is as good of a time as any to buy a house. Any delay could lead to higher costs due to a rise in housing prices and/or interest rates. Another cost consideration is climbing rent costs. For those currently renting, waiting to buy a home could potentially mean more out-of-pocket monthly expenses and less opportunity to save.
Is waiting to buy the best strategy?
Timing the market is nearly impossible, as circumstances could change at any given point in time. One thing is certainly clear: it doesn’t look like housing prices will drop dramatically anytime soon. So the real question is, why risk waiting?
Taylor Wilson warns, "The home a buyer loves today will be 5%-10% more expensive next year, and interest rates may be higher, putting that home out of reach. Buyers hoping to ‘time the market’ may find themselves renting for the foreseeable future."
If you’re prepared to buy a house in early 2022 and are just waiting for the right time to pull the trigger, set yourself up for success by aligning yourself with a trusted mortgage lender sooner rather than later. At Accept.inc, we help everyday homebuyers who qualify for a mortgage gain the competitive edge needed to make a winning offer using the power of cash, while offering competitive rates and no extra or hidden fees.
Ready to get out there and snag your dream home? Get Cash Approved today!
Dan S | Apr 26, 2022
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