Supply and Demand are driving prices up still. The beginning of 2022 shows us that market inventory is still low and buyers are still plentiful. Experts around the country are estimating we will see prices increase throughout the year including the HOT spring/summer market.
Rates are forecasted to increase as the year goes on. January showed us up an increase from 3.25% to 3.75%, which then went back down in the 3.4% region. While rates may be increasing, we are still at historically low rates in the last 50 years.
So what does that mean for you as the consumer? Glad you asked!
Your rate is the interest you pay on your principal balance back to the bank holding your loan. If you lock in a 3.5% interest rate now things are a going to look good for you. You have locked in a fixed rate for the next 30 years, no matter how high prices go.
Where as renters, well every time their lease renews they will be facing increasing rent prices as as the market continues to grow.
Now, A LOT, and I mean A LOT, of people I talk to on a daily basis go "So when is the market going to crash?" .... Well it really is not that simple.
See, we are not in the same boat as 2008. Lenders are actually verifying income and assets for buyers. Interest rates are not in the 6% range, their are actually lending protection laws now. (THANKS TRID). Now buyers/consumers get documents at least 3 days in advance and can actually see what their payment is going to be including the breakdown of principal, interest, taxes, and insurance are. In 2008, let us just say... lenders liked to make promises to clients, and the new homeowner would be shocked on that first mortgage statement they got in the mail. Can you say.... SHADY?
So in the real estate institution, we are thankful for the "new" TRID laws and guidelines and our buyers are more protected than ever!
Need a visual on how rates work and effect your payment? We got that for you too!
So, Now What?
Sellers have to sell! The only thing that can change the pricing trajectory we are on is an influx of inventory. And I think some of the language us agents use is part of the problem. Sellers are less likely to list if they feel like they can't find somewhere to go after or having to pay TOP $ for their next house. As and agent, I continue to advise my sellers that we can list their property and accept an offer and closing is subject to them finding a new home of their choice. In my opinion, this should be a standard in a low inventory market. This gives our Sellers a safety net and makes it more comfortable for them to move forward with the sale. And honestly, what is better than protecting our client? NOTHING!
If we change our language and stop telling our clients the market is 'bleak" or "challenging" and instill the confidence we should be, we might be able to bring stability to homeowners around the country.
That is just my two cents on the market. But go, read, educated yourself. #KnowledgeisPower
On the end note, buying is still less expensive than it was in 2010. Listen to your agent. Our job is to understand the market trends and protect YOU. Working with an agent will provide you with a steep advantage in this market. Have questions? A different opinion? Let's Chat!
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