Buyers in today’s housing market are faced with numerous challenges. A low housing inventory leads to increased competition and heftier prices for the homes that are for sale – and don’t forget about the rising interest rates! Here are 3 tips on how to successfully handle the tricky housing market.
1. Be patient, but lock in your rate
Homebuyers that exercise patience in today’s market can win. It typically takes about three months to find a home, and this is especially true for entry-level buyers who are facing a market that has a scarcity of homes below $200,000. One way to deal with rising rates and limited supply is to lock in your mortgage rate, which allows borrowers who prequalify for a loan to lock in the current rate. This is useful for people who might need to submit multiple offers and want to avoid being exposed to mortgage rate hikes in the process.
2. Work with a connected real estate agent
A great real estate agent should be very familiar with the community where you are house hunting. An established, local real estate agent also is likely to have a deep network of connections that might ultimately give you an advantage in locating a house. He or she might know of houses that are going up for sale before they even hit the market, which can work in your favor. For instance, a seller might be willing to take your offer and avoid the stress of putting a house on the market and fielding multiple offers.
3. Don’t wait for a price drop on the house you want
If you’re thinking about making an offer on a home, it may not make sense to wait and see if the sellers will lower their price. Home prices in fourth quarter 2017 were up 5.3 percent year over year, according to the National Association of Realtors. The lack of homes on the market means that if you don’t jump on the home you want, there’s a good chance it will sell to someone else.
And, as always, don’t hesitate to discuss these and other first-time home purchase issues with your personal PERL loan officer.