When interest rates decreased at the beginning of the pandemic, the real estate market throughout most of the country heavily favored sellers. As interest rates decrease, more buyers enter the market to secure mortgage loans with low interest rates.
Low interest rates, extremely quick sales, low inventory, and rapidly increasing price gains has the housing market favoring sellers.
Buyers
In 2022 interest rates have been increasing. While rates averaged around 3.05% towards the end of 2021, they have since increased to an average of over 6% as of June 2022. Even though there are still a high number of potential buyers on the market, the higher interest rates have stabilized the market.
In many areas, home values rose by 20% or more over the course of 2021, which means that buying a home today is more expensive than it was just one year ago.
While home prices may have been lower a year ago, the increased buyer competition in the market made it difficult to make bids that were high enough for sellers, who often had multiple offers to consider. Once demand decreases among buyers, home inventory will increase, which means that you may find it easier to purchase a home without needing to make an offer that’s far above the listing price.
Sellers
If you’re looking to sell your home but worry that the market may not be favorable for doing so, the truth is that the housing market still favors sellers. The main difference is that there may not be a lengthy bidding war when you list your home on the market. However, sellers still hold ample amounts of negotiating power when an offer is made. If you want to make sure that your home is sold without delay, perform any necessary upgrades and repairs before placing your home on the market.
While it’s unlikely that the housing market will shift completely to favoring buyers immediately, it’s looking increasingly likely that the market will be more balanced over the next year or so. A balanced and healthy market is great for buyers and sellers alike.
I can help you with pre-qualifications, pre-approvals and interest rates. Just call me!
Jim Haley
630-229-5006