Overwhelmed by the Housing Market? Catlin Capital is Here to Help.
As frustrating as it may be, one of the largest factors to consider when buying a house is something you have no control over in the local market. The market you are interested in may not have many homes in your price range or the right location. On top of that, some market values dictate whether or not owning is even a viable option. While it is becoming cheaper to own than rent in some markets, there are those times when renting is justifiable. It all depends on the current state of the particular market you are interested in. So while interest rates are important, it is equally important to own in the right market.
Remember, preparation is key in today’s housing market:
Buying a home is a huge accomplishment, but the housing market is competitive. That’s especially true when it comes to mid-priced, affordable houses. So how do you get ahead in a hot market? The key is preparation.
The sooner you prepare to buy a house, the easier it’ll be to beat the competition.
Assuming you have your money situation under control, your next consideration is housing-market economics—either in your current locale or the one where you plan to move. A house is an expensive investment. Having the money to make the purchase is excellent, but it doesn’t answer whether or not the purchase makes sense from a financial perspective.
One way to do this is to answer the question: Is it cheaper to rent than buy?
More on the Economic Outlook:
Along those same lines, there are years when real estate prices are depressed and years when they are abnormally high. If prices are so low that it is obvious you are getting a good deal, you can take that as a sign that it might be a good time to make your purchase. In a buyer’s market, depressed prices increase the odds that time will work in your favor and cause your house to appreciate down the road. For example, if history repeats itself, we may see a drop in home prices due to the response to the COVID-19 pandemic and the dramatic impact on the economy.
Interest rates, which play a prominent role in determining the size of a monthly mortgage payment, also have years when they are high and years when they are low, which is better. For example, a 30-year mortgage (360 months) on a $100,000 loan at 3% interest will cost you $422 per month. At a 5% interest rate, it will cost you $537 per month. At 7%, it jumps to $665. So if interest rates are falling, it may be wise to wait before you buy. If they are rising, it makes sense to make your purchase sooner rather than later. Always keep in mind that there can be opportunity in the future to refinance the interest rate, so Catlin Capital will always track and stay in touch with you.
Time of Year:
The seasons of the year can also factor into the decision-making process. Spring is probably the best time to shop if you want the widest possible variety of homes to choose from. Part of the reason relates to the target audience of most homes: families who are waiting to move until their kids finish the current school year but want to get settled before the new year starts in the fall.
If you want sellers who may be seeing less traffic—which could make them more flexible on price—winter may be better for house hunting (especially in cold climates), or the height of summer for tropical states (the off-season for your area, in other words). Inventories are likely to be smaller, so choices may be limited, but it is also unlikely that sellers will be seeing multiple offers during this time of year.
However, it is worth noting that some savvy buyers also like to make offers around holidays, such as Christmas or Easter, hoping that the unusual timing, lack of competition, and overall spirit of the season will get a quick deal done at a reasonable price.
The importance of checking and understanding the market:
Depending on current economic situations and other factors, the real estate market can move either in the seller’s or buyer’s favor. A buyer’s market means that there are more houses for sale than buyers. A seller’s market, on the other hand, occurs when fewer homes are on the market than buyers.
These market conditions can determine how much room you have when making an offer. Talk to a real estate agent who can help you understand the real estate market in your area and how it’s currently affecting buyers.
Catlin Capital has expert consultants that can help guide you through the overwhelming housing market trends and assist you with any questions you have about home loans. It is crucial that you have home loan experts you can trust during this process. Once you’re ready, Catlin Capital can quickly go through the pre-approval process with you so you can shop confidently and close quickly.