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The price of homes has rose significantly across the country in the past few years, locking out many hopeful buyers during the COVID-19 pandemic. As the economy begins to rebound, potential homebuyers are faced with a question: should they continue to wait for possibly lower rates and housing prices before entering the market?
An analysis released by the New York State Association of Realtors (NYSAR) revealed that mortgage rates in April averaged their highest level since 2010. The monthly average on a 30-year-fixed-rate mortgage rose from 4.17% in March 2022 to 4.95% the following month in April, according to data from Freddie Mac. Rates are expected to continue to rise as the imbalance of demand and supply pushes up home prices.
According to an analysis by Zillow, waiting even a few weeks in the current market can cost buyers tens of thousands of dollars. The median U.S. home listing price was $410,000 in March 2022 and $470,000 in April, according to a report from the NYSAR. Experts don’t expect this to slow as we head into 2023, especially with 45 million millennials entering the market.
Different loans require different qualifying factors. While you may consider waiting to save for a conventional loan and eliminating the need for mortgage insurance, rates may rise to the point of costing you the same amount you would pay for mortgage insurance.
If you wait to purchase a home, you may be stuck renting for an extended time. Renting not only has less stability than purchasing, but it also builds equity for whoever owns the property instead of yourself. Market experts such as Realtor.com are expecting increasing rent prices in 2022, in part from landlords trying to recoup their losses after the pandemic. In July of 2021, Realtor.com found that first-time homebuying was more affordable than renting in almost half of America’s largest markets.
Major news outlets tend to discuss housing trends by covering the national market, rather than specific states or cities. Local market trends may move more quickly than larger markets and can be difficult to predict. Waiting could cost you your dream home.
If you’ve been preparing to buy, the perfect time to purchase is now. It may be a long while before prices and rates begin to drop. When you’re ready to learn more about your best options, contact us today.
Homestead Funding offers exceptional customer service and a convenient mortgage process. Whatever your financing needs, our goal is to exceed your expectations.