There's a big challenge standing in the way of your future home, but it's time we address it. The current housing market is experiencing a shortage of available houses, causing frustration for first-time buyers and those with limited budgets. This situation leads to higher prices for sellers and fewer options for buyers, forcing them to act swiftly or risk missing out. However, there are straightforward and reliable steps that first-time buyers and budget-conscious individuals can take to thrive in a seller's market.
At Crosscountry Mortgage, we're here to provide you with the knowledge and resources you need to navigate the current market confidently. Whether it's getting pre-approved for a mortgage, increasing your down payment, or taking advantage of down payment assistance programs, we've got you covered.
Why is Housing Inventory So Tight Right Now?
The shortage of housing inventory can be attributed to two significant factors. Firstly, the construction industry has fallen behind, and as a result, home values have plummeted in the past. This slowdown in construction has made it challenging to meet the current demand. Secondly, the COVID-19 pandemic sparked a surge in homebuying activity. With people spending more time at home, many decided to purchase a new home to accommodate their changing needs. Additionally, historically low mortgage rates made homeownership more attractive and affordable. However, the increased demand combined with limited housing supply has led to a significant decrease in available homes.
According to the National Association of Realtors, there is currently only a 2.6-month supply of available houses on the market, far less than the recommended 6-month supply for a healthy market that meets buyer demand. The good news is that experts predict housing inventory will increase by more than 20 percent this year compared to last.
Simple & Secure Strategies to Succeed in a Seller's Market
Understanding the difference between a buyer's market and a seller's market is crucial for your success in the housing market. In a seller's market, sellers have the advantage, with more buyers competing for limited homes. As a result, sellers can dictate terms and prices tend to rise. On the other hand, in a buyer's market, there are more homes available than interested buyers, providing an opportunity for negotiations and potentially lower prices.
To help you succeed in a seller's market, we've put together simple and secure strategies that can make a difference:
Get pre-approved: Before you start searching for a home, it's essential to get pre-approved for a mortgage. This step gives you a clear understanding of your budget and shows sellers that you are a serious buyer ready to make a purchase.
Increase your down payment: If possible, consider increasing your down payment. Not only does this demonstrate financial stability and commitment to the home buying process, but it can also help you secure a better mortgage rate.
Consider a starter home: In a seller's market, purchasing a starter home can be a wise choice. While it may not be your dream home, a starter home offers affordability and the opportunity to build equity over time. You can leverage rising home values to eventually upgrade to a larger, more desirable property.
Expand your search area: If you're struggling to find suitable options in your desired location, consider expanding your search radius to nearby neighborhoods or adjacent cities. Be sure to account for additional costs such as commuting expenses and potential lifestyle changes.
Explore fixer-uppers: Don't be afraid to consider homes that need some renovation work. Fixer-uppers often sell for less than move-in ready homes and provide an opportunity to build equity through improvements. Just make sure you have a clear understanding of the necessary repairs, costs, and a realistic budget and timeline for renovations.
Explore new builds: Purchasing a newly constructed home can be an excellent option in a seller's market. These homes often come with energy-efficient features and warranties, providing long-term savings. Some builders may even offer upgrades to attract buyers.
Let's Make Your Homeownership Dream Come True!
When it comes to taking the next confident step towards homeownership, Crosscountry Mortgage is here to assist you. We are dedicated to assisting you in achieving your goals with utmost professionalism and commitment. If you have any questions or want to learn more, reach out to your local Mortgage Advisor today or visit our blog page for additional information.
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