"Buy now, or wait?" This is the exact question we're hearing the most as real estate professionals. Buyers across the country are eager to purchase their next home, but is this really the right time? With the added factor of skyrocketing market values, when is the best time to make the jump? While you might hear a lot of direct opinions in favor or against buying, it's essential to consider your unique circumstances before taking anything to heart.
Both nationwide and even our local market data agree - buyers across the US are hesitant to commit to today's interest rates, with many opting for a "wait and see" tactic. According to the Fannie Mae Home Purchase Sentiment Index released last month, an overwhelming 81% of consumers believe now is a bad time to buy a house. But while home sales are down this year compared to last, we're already seeing a growing increase. It appears that with the historically low rates of the pandemic now firmly behind us, some households may be moving past the hurdle of last year's sharp jump in rates.
After years of being at a constant disadvantage, some buyers are finding that the odds of finding the right property are finally in their corner. Days-on-market figures have increased across the board, giving buyers more time to make a decision and search out the best properties to fit their needs. Locally, we're seeing less bidding wars and a huge uptick in buyers who are ready to get back to looking for their next home.
"The latest jump in sales activity provides clear insight to the positive demand in our local market areas. Buyers want to make their move, and we're getting back to a place where they have time to tour multiple properties and negotiate the terms of the sale - this is a huge relief for them compared to years past. As the markets continue to balance out, both home sellers and buyers alike seem to be ready to make moves that may have been on hold for a while, and that's great news for all of us."
Tom Bookhardt, Realtor® / CEO, United Real Estate Partners
Mortgage rates have fallen down from the 8% highs in October 2023, but only by a point. Most major forecasts expect rates to drop more throughout the next couple years and land somewhere in the 5% range, but unfortunately no one can predict the exact timeframes or numbers.
It's also important to consider that homes across the nation experienced a huge surge in values back when rates were low, and those higher values are more often here to stay. According to the National Association of Realtors®, home prices have risen year-over-year for 8 consecutive months. With all the data pointing to a continued climb in values, it's safe to say that most home prices will continue to rise - especially if mortgage rates fall and give buyers more spending power.
Average 30-Year Fixed Mortgage Rate (January)
So, is Now the Right Time to Buy?
For those who are choosing to wait, one solid bit of information is that you definitely don't want to do this out alone. The housing market is constantly evolving, especially here locally. Whether you want to wait a month or a couple years, it's never too early to connect with a Realtor® and lender to help you determine the following:
Localized housing market data. Your Realtor® can provide data to help you better understand our housing markets so you can get a better idea of the cost of the properties you want to see yourself in.
How's your credit? Anytime you're considering borrowing money, you need to check on your credit score. The best mortgage rates will go to those with the best scores. While some loans require a minimum score of 580, you want to set yourself for the best financing available. Working with a lender before you're ready to buy can give you insight and time to bring your score up to equate to a more valuable mortgage rate.
What type of loan will you need? Depending on your personal circumstances, the desired location of your property, and it's condition, there are many loan types to choose from. Some loans offer a 0% down payment, where others require 3.5% and even 20%. You want to know what to expect, and have time to prepare.
For those ready to pull the trigger now, buying could be a great advantage! With some buyers choosing to wait, you have the opportunity be more selective with your home search. With houses staying on the market longer right now, you have the ability to negotiate; and when you do buy, you're able to start building equity immediately in a market that's seen increase year after year. Later, if and when the mortgage rates fall, you'll have even more equity in your home and can weight the benefits of refinancing to a lower rate.
The Big Takeaway
Buying a house right now might seem overwhelming, but waiting without guidance could present its own challenges as well. Whatever your motivations and hesitations are, the same advice rings true either way: having a Realtor® and lender on your side is always the best place to start.
If you see yourself buying anytime within the next few years, we welcome the opportunity to work with you! United Real Estate Partners consists of over 100 agents across Jefferson, Orleans, St. Bernard, St. Charles, St. Tammany, Tangipahoa, and Washing Parishes. We also suggest contacting our preferred lender, Josh Foster at GMFS Mortgage. He has a great first-time homebuyer budget worksheet here to help you take the first step.
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