While the choice to purchase comes down to individual factors, market conditions show several advantages of buying this season:
1. Buyer demand has slowed.
Gone are the days of multiple offers on almost every house, requiring you to bid thousands over asking price. At least, for now. As mortgage rates have risen, homebuyer demand has dropped.
Is it a good time to buy a house? With less competition, you may see more homes in your price range. This could be compounded by the fact that buyer activity also naturally wanes in the winter. If you continue your home search through the winter months, you may find it easier to get your offer accepted.
2. Mortgage rates may drop.
No one can predict what mortgage rates will do. But some housing authorities expect affordability to start to improve as rates soon decline. When rates lower—even slightly—it can help buying power to increase.
Still, the mortgage rate that you purchase at isn’t forever, and many homebuyers choose to keep this in mind. If you’re prepared to buy now, you can always refinance in the future, if and when rates drop. You can also ask your Loan Officer about strategies, like a Temporary Buydown, that can help to lower your rate.
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3. Home prices are expected to keep rising.
Mortgage rates may come down, but the same can’t be said for housing prices. Forecasts from housing authorities vary, but CoreLogic currently predicts a 3.4 percent year-over-year home value increase. If you’re prepared to buy now but are hoping to time the market, rising home values may factor into your decision. The home you’re looking at today could cost more in a few months’ time.
Of course, higher home prices aren’t the only reason to expedite a home purchase. Buying sooner, for those who are able, gives you the chance to begin building prosperity; home equity grows as home values rise.
4. Price cuts are possible.
As higher mortgage rates pump the brakes on homebuyer demand, many sellers continue to drop their prices. Time on the market is also longer—now at 46 days. Is it a good time to buy a house? This winter, sellers may be more motivated to consider and accept offers rather than letting a listing go stale.
You might also enjoy seasonal price dips in addition to market-driven price cuts. December and January have some of the “best days to buy.”
5. You may have more negotiating power.
The rock-bottom mortgage rates seen during the pandemic triggered unprecedented levels of buyer demand, creating a strong seller’s market. Now, the tides are turning. It technically remains a seller’s market, evidenced by the 3.4-months’ supply of unsold homes. But homebuyers are seeing their negotiating power increase as demand moderates.
In the months ahead, bidding wars are much less likely, especially since winter is considered an off-season. Sellers may be more willing to accept contingencies, and buyers may no longer waive their inspection. As a homebuyer, you may have more room to negotiate on repairs and/or price.