Only 25% of Americans Think Now Is a Good Time to Buy a Home

Table of Content

• Conclusion: The Best Time To Buy A Home Depends On You
• CitiBusiness AAdvantage Platinum Select Mastercard Review
• Buy in November for a better price
• Inventory remains tight
• Thinking of buying a home, but unsure where to begin? Zillow simplifies the buying journey.
• Year-over-year home price increases slowing

There are several reasons that make the start of 2022 a less-than-ideal time to enter the housing market as a buyer. Make no mistake, it will still be a seller’s marketfor the next several months, if not several years. Demand for homes still outstrips the supply in many areas of the country. That was up from 2.4 months from the prior year, but was still well under the five- to six-month supply that's generally considered a balanced market with plenty of buyers and properties for sale. Nine homeownership and affordable housing bills are working through Congress to give first-time buyers programs tax credits, cash grants, and other purchase incentives. Effective immediately, Fannie Mae and Freddie Mac mandate mortgage rate discounts for low- and moderate-income first-time buyers.

Homebuyers also have the option of doing an Adjustable Rate Mortgage. In deciding a good time to buy a home, remember that purchasing when home values are trending upward is always a good idea, as you will start building equity immediately. While nobody can predict the market, these are some of the factors that might indicate a good time to buy — and a good eventual return on your investment. Additionally, August is the final month in the time span where listings are most abundant nationwide. Generally speaking, buyers in the fall and winter will have fewer options yet more flexibility in price, and spring and summer buyers will have more options, but less negotiating power. "Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers," Lawrence Yun, NAR's chief economist, said in a press release.

Conclusion: The Best Time To Buy A Home Depends On You

According to Nadia Evangelou, director of Forecasting for the National Association of Realtors, rates may exceed 6 percent. They did momentarily before the Federal Reserve's June announcement of a rate rise, but have subsequently backed off. If buying a home is a good fit for your financial situation, you’ll want to be prepared to make an offer on a home as soon as you find one you love.

Listing price growth remained within the double-digits but continued to moderate. Jamie Johnson is a Kansas City-based freelance writer who writes about a variety of personal finance topics, including loans, building credit, and paying down debt. If nothing else, it’s a good idea to do your research and look into it. After crunching the numbers, you may find that your mortgage payments would cost less than you’re currently paying in rent.

CitiBusiness AAdvantage Platinum Select Mastercard Review

Check your eligibility and the latest interest rates to see if locking in a mortgage and buying a home is right for you. For these reasons, Meyer cautions against chasing lower rates and/or lower home prices. The median U.S. sales price shot up 14.6% annually in the four-week period ending Dec. 26 and climbed to a new all-time high of $361,171, according to Redfin. Historically speaking, today’s mortgage loans are still ultra-affordable. It’s more about your personal finances than it is about the market.

In June and July, the Fed raised interest rates by 0.75%. And the central bank may not be done with interest rate hikes. Each week, you'll get a crash course on the biggest issues to make your next financial decision the right one. There’s some sticker shock in the market right now, with home prices up 10% year-over-year. Stay-at-home orders, virus transmission concerns and mass layoffs not seen in nearly a century turned the economy upside down. Conditions were primed for a recurrence of a housing collapse resembling the Great Recession, but surprisingly, that didn’t happen.

Buy in November for a better price

According to real estate data company Altos Research, homes for sale dropped 2.5 percent post-Thanksgiving to 550,000 homes. Furthermore, the group expects another five percent inventory drop into the New Year. The mortgage rate fall marks the most significant 3-week decline since 14 years ago. It’s the fourth fastest drop in more than three decades. Activity in home sales is still strong on the higher end of the housing market, where there is more supply. This is the longest streak of year-over-year growth ever recorded, spanning 127 months.

Their forecast for 2022 purchase volumes remains at $1.7 trillion, essentially unchanged from last month. By buying a new home, they risk increasing their monthly expenses significantly. So, if you don’t have a hard date of when you want to buy a new house, waiting until it makes more sense for you financially may be a better option temporarily. By waiting to purchase a home, you may be able to enter the market when there are fewer buyers looking or more homes available.

Home Equity Loan.

The window may extend into the early 2023 housing market, too. The total inventory of unsold homes, including pending listings, increased by just 0.5% year-over-year due to a decline in pending inventory (-30.0%). The Fannie Mae (FNMA/OTCQB) Economic and Strategic Research Group revised downward its forecast for total home sales growth through 2023. They now project 2022 total year existing sales to decline 16.5 percent from 2021, followed by a further decline of 13.3 percent in 2023.

Today’s home buyers may see 5 percent mortgage rates soon. Despite higher mortgage rates, most still think home prices will rise further. Analysts vary but most believe the current double-digit annual gains will shrink to around 4% to 6%. Consumers have long been bullish on home prices, except following the Great Recession and the subprime mortgage crash between 2008 and 2012. The supply of homes for sale is also still historically low, and even the usually busy spring market has done little to boost inventories. Demand, especially from the millennial generation, is strong, but buyers are stepping back due to the costs.

The problem is, it’s not easy to time when home prices will be low and the number of homes for sale will be high. Even if you could, you’d have to be in the right place in your ever-changing season of life and financial situation. Use an online mortgage calculator to see how much you can realistically afford. Of course, how much you can actually afford varies person to person; no single rule works for everyone. It takes a minimum FICO score of 620 to qualify for a conventional loan; however, applicants with at least a 740 receive the best interest rates . And in fact, the average FICO score for first-time homebuyers is 746, according to a recent report from Fannie Mae.

But that doesn’t mean prospective buyers should be put off by rising rates. Maurie Backman is a personal finance writer who covers topics ranging from Social Security to credit cards to mortgages to REITs. She also has an editing background and appears on live podcasts to talk about financial matters.

In October, the median price of an existing home sold was $379,100, up 6.6% from a year prior, according to the National Association of Realtors. And since it's a seller's market, a lot of buyers go above the asking price just to get an offer accepted. As such, if you buy a home in 2022, you're likely to pay a premium. And unlike last year, you may not get a low mortgage rate to offset that higher price. The process normally involves a lot of back and forth with the mortgage lender, and then you might not hear anything for a week, which only adds to the anxiety . The whole process can take up to a month or two before receiving a “clear to close” from the bank.