Why You Shouldn't Wait To Buy A Home In This Market

Dated: April 28 2022

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Don't wait to buy a home in 2022-O'Brien Realty Blog By O'Brien Realty

These are interesting times, but getting cold feet in this hot market could still leave you burned. With home prices and interest rates rising, it may be tempting to delay your home search until the market calms down, but it could cost you in the long run. Here’s why you shouldn’t wait. 

 

Prices Aren’t Dropping (And Neither Is Demand) 

Home prices hit another record high in March at $405,000- a 13.5% increase from a year ago! Plus, they are currently projected to keep rising this year. But it’s not all bad, they are also expected to rise at a much slower rate, (5.1%) than what we saw last year with the record high 20%. We can credit all of this to the low home supply. There still aren’t enough homes on the market, and that is clearly being reflected in the high home prices. The pandemic and other recent events have caused supply chain disruptions, a lower home supply, and an increasing buyer demand. Unfortunately, this is all going to take some time to correct. Until then, the prices (and demand) are going to keep growing, just at a slower rate. It might be tempting to try and “wait all of this chaos and competition out”, but the data and experts are saying you might be stuck waiting too long for things settle down. So you don't want to wait and miss out on your housing opportunity. Plus, there are some additional risks that come with waiting…

 

Waiting Could Cost You 

With the interest rates increasing, that now means that you might have to pay more each month for a standard 30-year mortgage. With the buyer demand not slowing down, increasing inflation rates, and global uncertainty surrounding events like the war in Ukraine, it is very likely that they may change again. While the rates are still historically low, any change can lead to higher payments if you purchase a home during this time. In fact, a recent Zillow report found that homebuyers who purchased in March 2022 paid almost 20% more than those who bought in January 2022 with the same 30-year mortgage! So it may not be the best idea to wait, you could end up paying more for that delay. 

 

This Isn’t A Bubble- So There Won’t Be A Burst 

Worried that there is a growing housing bubble that will lead to another burst and financial recession like we saw 15 years ago? You aren’t the only one. But that isn’t the case for today’s market. Right now, it seems like we are in a housing bubble because the demand for homes is so high, and the prices are climbing. 

But, there are a lot of different reasons for this, the biggest being that the real estate supply and demand are out of balance. There is currently a low inventory of homes being sold and an increase in buyer demand. (Making it the perfect time to sell) This certainly makes this year's market a seller’s one, with the best return on investment, and an intense competition for buyers. All of this is resulting in high home prices. This is very different from the dishonest lending practices and investor speculation in the housing market that caused the previous bubble. Instead of people borrowing too much and artificially increasing home prices, home values are now going up because there are more buyers and limited homes. It is important to note that this can all change without a “burst”. The pandemic, war in Ukraine, and other challenges we have been facing these past couple years have caused delays in home building. As soon as builders are able to catch up, the home supply will go up, and the market will balance out. So sorry to burst your bubble, but if you are waiting for the market and prices to crash again, that probably isn’t going to happen anytime soon.

Economic Uncertainty Brings Ups & Downs (In Interest Rates & Your Finances) 

It might seem like a good idea to try and “wait out” these rising interest rates, but as we established above, you could be waiting a long time and missing out on some great opportunities now. Currently, experts predict that the rates will continue to rise. Although there might be some slight decreases due to global uncertainty and recent events like the war in Ukraine, that isn’t necessarily a good thing. Lowering rates usually reflect economic uncertainty, and that applies to the housing market and your own finances. A sudden change could impact your expenses, income or even job security- things you don’t want to change if you are making a significant long-term (and expensive) financial investment. So instead of waiting for the rates to drop, it’s probably better (and safer) to talk to a lender now and work to get pre-approved before rates increase again. After all, even with the mortgage rates rising, the rates are still historically low.

 

So If I Shouldn’t Wait, Should I Just Buy Now?

Just because you shouldn’t wait to buy a home until the market balances out, does not mean that you should rush in and buy whatever you can before the market changes again. Remember, times of uncertainty don’t just apply to the housing market, they also apply to your financial situation. The last thing you want to do is rush into one of the biggest investments of your life just because you have FOMO (Fear Of Missing Out) and risk your own financial situation changing. Rushing to purchase a property that you aren’t really happy with at a low rate doesn’t necessarily save you money either. If you stay in the property for only a few years and then try to sell, you could lose money (sellers are usually responsible for a portion of closing costs). 

 

Then What Can You Do? 

Yes, the market is changing, but thinking about your housing and financial situations in the long-term instead of focusing on the short-term fluctuations will help you make the best financial decisions. Instead of focusing on the fluctuations in the market, you should base your home buying journey on your own personal and financial timelines. Remember, being patient and waiting until you are financially ready to start house hunting and finding a long-term home is much different than rushing into an “ok home” while you think the rates are low or waiting for the market to settle down. Sticking to your timeline and keeping in touch with your lender and O’Brien agent throughout the process will ensure that you are ready for any potential market changes or uncertainty thrown your way. We know the Southern Maryland market, and we are here to help you with any of your real estate needs. 


Ready to start your home search? Connect with a local lender, or find your O’Brien agent here, or start searching for homes with our custom property searches. Finally, here is our 2022 Homebuyer’s Guide to help give you an edge over the competition! Come see what The Best Of Southern Maryland has to offer!

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