What will the housing market look like for Buyers this Spring?
Spring is here! Well almost, but the Spring Buyers have started searching! If you are planning to make a move allow me to give you some insight as to what to expect when starting your search.
Low housing inventory:
A shortage in housing inventory (the number of homes that are currently listed for sale on the market) has been the cause of raising home prices and multiple offers for the past several years. I do not expect this to change any time soon, especially, this season. Homeowners are rate-locked causing them to stay put. The average homeowner has an interest rate that is 4% or below according to the Federal Housing Finance Agency. This is causing what I call “just because moves” to come to a halt, furthering the low inventory issue and continued buyer competition for the few homes that are on the market.
Better Negotiations:
Even though I am still expecting to see multiple offers and high buyer competition this season I still think the window of opportunity for better buyer negotiations is there. Everyone knows that interest rates are much higher than this time last year. This has made sellers more willing to accept offers that request seller paid closing costs, whereas, in years past it was extremely difficult to get an offer like that accepted. They are also being more reasonable with their asking price. So, even if you are paying several thousand dollars above their asking price to beat your competition, it is not on top of an already inflated asking price like years past. I am also seeing more sellers that are willing to negotiate a few repairs for buyer's this season instead of demanding an as-is sale.
New incentives and loan programs:
Several builders are giving incentives like credits toward closing costs and extra appliances when you purchase homes with them. If you are looking to purchase a brand new home you are getting a much better deal than in years past. Lenders are also coming out with more incentives to help offset the higher interest rates, such as, paid appraisals, closing cost credits and zero money down financing programs.
My biggest take away is that even though interest rates are higher, buyer negotiation power is much greater this season putting them in a better position when purchasing a home than years past and allowing them to actually get their offer accepted!
If you are thinking of purchasing a home this season or know of someone that is please don't hesitate to call, text or email me! I would love to schedule a time to chat about your options!
Latest rates as of March 2023:
5.9% for a VA loan, 6.5% for a conventional loan and 6.2% for an FHA loan. *Rates change daily and are subject to each individual lender/bank and borrowers credit profile. If you need a trusted lender recommendation please don't hesitate to ask.