Why Now Is a Good Time to Buy a House
While the real estate market has benefited home sellers for the past few years, many experts believe it’s quickly becoming a better time for buyers. Inflation has been a struggle for the U.S. throughout much of 2022 and the beginning of 2023, and this might make you think home prices will follow suit. However, the Fed has been busy raising rates over the past several quarters. This has created a 2023 market that makes it a potentially good time to buy a house.
Home Prices Aren’t Expected to Bottom Out
A shortage of homes over the past few years has created a very strong demand. This, combined with low-interest rates, sent home prices soaring. This is expected to change now, regardless of demand, because of the increasing interest rates. Some buyers will be scared off by the higher interest rates, while others won’t want to trade in a 3% mortgage for a 7-8% one because it wouldn’t provide the benefits many want when they shop.
This could leave a market of buyers who are Without a larger pool of potential buyers, the demand for homes will likely decrease and send home prices downward. Over the past few years, the increased construction of houses could increase the supply of homes and contribute to the decline in prices.
Those activities may cause you to think that home prices will continue to drop and that you can wait for the best deal. However, the demand for people who want to own a home = should stay strong. This will likely stop home prices from bottoming out, and prices should remain fairly constant throughout the year. This makes it an excellent opportunity to start looking.
First-Time Homebuyers Can Still Get Strong Rates
While someone who currently has a mortgage and is paying a low-interest rate isn’t going to be excited about selling and getting a new mortgage with a rate twice as high as their current one, that doesn’t mean everyone falls into that category. There are still good mortgage opportunities out there for strong borrowers and first-time home buyers.
Many first-time home buyers can still get access to help with their down payment while getting a decent interest rate on their mortgage. First-time buyers are still seeing rates around 5%. That is a few points lower than the regular market and could be the best rate borrowers will see for a while. This makes it an excellent time to buy.
Many People Are More Financially Prepared Than Ever
The pandemic saw many people get access to large amounts of money through COVID-19 tax breaks and stimulus payments, and some were able to save. Some even put that money away and earmarked it for a potential house purchase. That is more money than the same borrower would have had otherwise, putting them in a better financial position to buy a home.
The pandemic also helped many recover their finances by paying down debt and improving their credit scores. These two things, combined with their inability to find the right house because of the supply problem over the past two years, have created a great opportunity for the right buyer to buy right now. They have more money than they previously had and don’t have to overpay for the house they want.
Sellers Are Willing to Make Deals
Another good reason to buy right now is that sellers are more motivated. People selling their houses are seeing less success than others have seen in the past few years as the demand has decreased. This means that sellers are more likely to negotiate the price of the home or other aspects of a sale agreement that may be important to you.
The real estate market was rough for buyers during the height of the supply shortage. Many would come in with an offer at the asking price and get outbid by someone who offered more money. Sellers didn’t have to give in to many items or negotiate. Things have changed now, and it will only benefit you as you try to find the right opportunity for your family.
As you can see, buying a house in 2023 can be the perfect time for you. If you’re thinking about buying, you should research and get your finances in order. Work with a real estate broker that can be aggressive at getting you the right financial opportunity to help you get into the house of your dreams. Waiting to buy could cost you time and leverage if the market turns again in the next 1-2 years.
When you’re buying a house, make sure you have the right lender by your side. Deere Employees Credit Union takes mortgages personally because it’s more than just a loan to us. We want to help get you into your dream home. Check out our rates today and let us help you buy your home.