Be forewarned, buyers aren’t going to like this blog if they are hoping for an extended drop in the housing market. I know there are buyers on the sidelines rooting for the market to go down. There always are, and those buyers often get priced out of the market as they wait for their golden opportunity. If I was considering buying a home, I think the next two to three months are likely to be the best chance. Here is why.
- Mortgage interest rates have come down. After surpassing the 7% mark this fall, they have now dropped shade under 6%, and the mortgage banking industry is expecting rates to keep dropping in 2023. That’s going to bring a lot more buyers into the market this spring. More buyers, leads to more competition and multiple offer situations.
- Inflation is coming down. Mortgage interest rates and inflation are related, and as inflation eases, mortgage rates will continue to decline. Lower interest rates will fuel demand, especially as we move towards the spring selling/buying season. A good call would be to buy now with the expectation of refinancing when the rates decline further.
- There are always less buyers in the market over the winter months. Less buyers mean less competition, and a lower likelihood of multiple offer situations.
- Sellers are motivated right now by current economic uncertainty. If all of the above turns out to be true, then their outlooks will be short sighted. History has shown that most people who buy over the winter end up with instant equity as their new homes appreciate with the spring markets, which often turn into buying frenzies!
My golden rule for home buying: if you can find a house that you like, and you can afford it, you should buy it. That means you shouldn’t be shy about pulling the trigger this winter. This might be your best shot.