In Mortgage Tips

If you are currently shopping for a home, whether you are a first-time homeowner or a seasoned investor, you may be wondering if now is the right time for you in today’s economic climate.

Your decision to buy should be balanced against the nation’s current economic situation of rising costs, inflation, and interest rates versus your financial situation, personal decision-making factors, and the many benefits of homeownership.

Will the housing market remain resilient in the current economic picture?

We are coming off a period of record-low rates following the 2020 recession. As we all saw, during the times of low-cost borrowing, it was a red hot seller’s market due to high buyer demand and low inventory. Average home prices were up almost 20% nationwide as buyers bid up purchase prices, often over the asking price. Housing experts expect these factors to continue to prop up home values.

Homeowners will be relieved to know that housing has shown to be one of the most resilient sectors, making a home a wise investment. Home prices are predicted to remain strong through 2023, with the seller’s market continuing its streak due to inventory remaining low while buyer interest is sustained, resulting in supported home prices.

One of the factors in your consideration to buy a home is the interest rate and how it affects your monthly payment.

We just came off a period of historically low <3% rates, driving a huge boom in purchasing and refinance activity. Then, in June 2022, the Federal Reserve, in an effort to head off inflation, recently raised the benchmark rate by three-quarters of a percent, rocking the stock market and putting sectors on edge. Buyers may be at unease as they watch the news.

There is a silver lining—although rates are going up, current mortgage rates average around 5-6%, which is still well below historical rates in the long-term market.

Keep in mind, that rates are expected to go up even further as the Federal Reserve combats high inflation in this overheated economy, so you may consider locking in at current rates before your costs rise even higher, with upward rates that may offset any future drop in home prices.

Another consideration is your financial situation. 

Your monthly income, credit score, and debt-to-income ratio are all used to profile you as a borrower. If you are currently in the market for a new home, you should work with an experienced broker who can help you advise on how to qualify and budget for your home purchase. HP Mortgage carries every available option, including non-QM programs for self-employed borrowers and investors, and our loan officers are highly knowledgeable about the rapidly changing mortgage industry. We make sure you are given the absolute best options for your situation.

Personal factors are often the biggest consideration in the decision to buy a home right now.

You may be interested in purchasing because you want to widen your portfolio given today’s market. Maybe you found a great investment property with a high upside. Or you may have a growing family. There are many other reasons such as relocating for employment, downsizing from your current home, or a desirable school district for your children.

Maybe you are tired of paying rent and anticipate rising rental costs in the near future, given the housing market conditions that continue to drive up the cost of housing in market conditions that favor landlords and sellers.

These are all good reasons to consider buying a home regardless of what type of market we are in.

Should I wait for inventory to open up?

Despite the turbulence we are seeing in the economy, considering the previous factors, now may be the right time for you to buy. Or, you might consider waiting until inventory begins to open up when the housing market cools down in the upcoming quarters. Nobody can predict how stable home prices will remain, but there is the consideration that even as inventory goes up, continually rising borrowing rates may offset drops in the purchase price.

If you think this is a good time to “wait and see” a pre-approval in the meantime can give you a jump start on future inventory availability as the buyers market continues to be competitive, and will also provide you with the knowledge of what home you can afford so you can monitor the homes for sale in your community. At HP Mortgage LLC, we are here to answer any questions about future home purchases, or help you determine if you can afford to buy that home today!

If you are considering buying a home now or in the near future, have an experienced mortgage professional on your side.

If you currently are shopping, or you plan to be in the market for a new home in the near future, the best thing for you to do is work with an experienced mortgage broker who will guide you through all your options from considering whether to buy, identifying the right loan product for you, and supporting you all the way through closing. We have options for every scenario, including non-QM products such as interest-only loans to carry you through the current market until a refinance opportunity becomes available, cash-out options, fix-and-flips, or purchasing fully debt-serviced investment properties.

Give us a call today to experience our exceptional service, and we will be happy to provide you with all your options.

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