Lately we’ve seen a lot of hand-wringing in the media: Rates are climbing. Buyers are shut out. Mortgage rates destroy home ownership dreams.
Don’t believe all you read. This is in fact a buyer’s market.
Of course the real estate news nationwide is focused on rising interest rates. And yes, while this is something that has changed dramatically for buyers everywhere, it’s actually good news for most. Here’s why.
After years of a high demand/low inventory market, the pace of real estate transactions is now slowing down, all as a result of rising interest rates. This means buying a home has become much less competitive.
And what does that mean? As inventory lingers on the market, buyers have more time and more breathing room to search for a new home. They have the opportunity to visit a property more than once before making a decision to present an offer.
With fewer buyers clamoring for property, sellers are learning to accept offers with inspection and financing contingencies. Sellers are also realizing that if they only have one interested buyer, they may have to negotiate their list price in order to sell their property.
Yes, the cost of a mortgage is higher than it was 6 months ago. But for many buyers, buying a home 6 months ago meant making a quick decision, offering substantially over the asking price and waiving all contingencies. For them, a home purchase became a scary and risky transaction.
Something else for buyers to consider: Rates will change; they will come down eventually. And at that point, refinancing becomes an option. So if now is the time to carefully and deliberately purchase a home, albeit at a higher rate than a few months ago, perhaps it’s not such a bad thing. Because now, buyers will benefit from a more normalized purchase price—and the opportunity to fully understand the home being purchased.
