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Buying a home is one of the most exciting and notable events in many people's lives. When conditions are right, buying a home can also be one of the best financial decisions you will ever make. However, inventory shortages and rising mortgage rates have made the market more and more competitive. The following tips will help you navigate the process and avoid making costly mistakes along the way.
How the Pandemic has affected the housing market
One key to buying a home in the current market is understanding just how the pandemic affected the housing market. First, the shutdown caused the housing market to come to a standstill. Then just as quickly, new home-buying trends emerged because of new and different buyers in the market. In addition, there were fewer homes on the market in 2020 than in 2019, creating a shortage of homes for sale.
In this new emerging housing market, buyers increased the demand for homes at a time when the inventory of homes on the market was already in short supply. This mixture of increased demand and decreased supply is what confronts buyers today in this extremely competitive market.
Here’s what you should understand as you search for a home in the current housing market.
Are you a first-time homebuyer? Does all of this sound daunting and overwhelming? Well, even if you are not a first-time homebuyer, it's important to understand that you are not just competing with the buyer next door. You're also competing with investors and all-cash offers.
So, what can you do when you're being priced out and find yourself in the middle of a bidding war? Here are a few recommended first steps to consider before jumping into this increasingly competitive housing market.
DVD Credit Union is here to help
We know how intimidating a home purchase can be, especially in these challenging times. That is why DVD Credit Union is here to help you along each stage of your home buying journey. Our mortgage loan experts will answer all of your questions and help you find the right solution for your specific financial needs.
From a lender credit to cover your closing cost to the ability to borrow up to 97% of the home’s appraised value, we offer a number of favorable promotions to help make your dream of home ownership a reality.
To get started, visit our website to learn more about the different mortgage options and interest rates DVD Credit Union offers. You can also call us at 0 (458) 500-2551 to speak with one of our mortgage loan experts.
Buying a home is one of the most exciting and notable events in many people's lives. When conditions are right, buying a home can also be one of the best financial decisions you will ever make. However, inventory shortages and rising mortgage rates have made the market more and more competitive. The following tips will help you navigate the process and avoid making costly mistakes along the way.
How the Pandemic has affected the housing market
One key to buying a home in the current market is understanding just how the pandemic affected the housing market. First, the shutdown caused the housing market to come to a standstill. Then just as quickly, new home-buying trends emerged because of new and different buyers in the market. In addition, there were fewer homes on the market in 2020 than in 2019, creating a shortage of homes for sale.
In this new emerging housing market, buyers increased the demand for homes at a time when the inventory of homes on the market was already in short supply. This mixture of increased demand and decreased supply is what confronts buyers today in this extremely competitive market.
Here’s what you should understand as you search for a home in the current housing market.
- Highly competitive market: A shortage of available homes and an increased number of buyers searching for homes combined to create enormous competition in the market. On the one hand, many people began working remotely and looking for homes in suburban and rural areas. On the other, a new group of millennial buyers was about to enter the home-buying market. In addition, people being priced out of rental properties also began searching for homes. As a result, home prices began to skyrocket, spurring bidding wars among prospective buyers.
- Rising mortgage rates: At the onset of the pandemic, mortgage rates were at historic lows, which served as an incentive for homebuyers. However, as 2021 came to an end, mortgage rates began to rise and this upward trend is expected to continue as the Federal Reserve is expected to raise the rates several times during the year in an attempt to combat inflation. And thanks to inflation as well as continued supply shortages, you should also expect home values to keep increasing.
Are you a first-time homebuyer? Does all of this sound daunting and overwhelming? Well, even if you are not a first-time homebuyer, it's important to understand that you are not just competing with the buyer next door. You're also competing with investors and all-cash offers.
So, what can you do when you're being priced out and find yourself in the middle of a bidding war? Here are a few recommended first steps to consider before jumping into this increasingly competitive housing market.
- Learn about the mortgage loan process before you start applying. If you are in the market for a home, get a head start and learn how the mortgage process works. Talk to your credit union about the pre-approval process, mortgage rates, and closing costs. And before you start applying for a mortgage loan, ask for a prequalification. Once you're ready, gather your financial information to obtain a pre-approval.
- Various experts predict further rate increases. If you've been keeping up with the news, you know that mortgage rates and sales prices have been going up in recent months. And this trend doesn't seem to be slowing down soon. Current predictions say housing prices will rise by at least another 2.9% in 2022. However, external factors such as the ongoing pandemic, inflation, and the war in Ukraine, will continue to influence interest rates. As a result, interest rates will keep fluctuating, and predictions will vary, so monitoring these rates is essential.
- Keep up to date with market trends at the time of your purchase. The housing markets are changing every day. A home can be listed on the market one day and then be sold in the blink of an eye. So watch where the market is going by keeping up to date with the news. Also, stay tuned with your realtor about market trends and keep in touch with your lender on mortgage interest rates so you can lock in your rate.
DVD Credit Union is here to help
We know how intimidating a home purchase can be, especially in these challenging times. That is why DVD Credit Union is here to help you along each stage of your home buying journey. Our mortgage loan experts will answer all of your questions and help you find the right solution for your specific financial needs.
From a lender credit to cover your closing cost to the ability to borrow up to 97% of the home’s appraised value, we offer a number of favorable promotions to help make your dream of home ownership a reality.
To get started, visit our website to learn more about the different mortgage options and interest rates DVD Credit Union offers. You can also call us at 0 (458) 500-2551 to speak with one of our mortgage loan experts.