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Tuesday, February 27, 2024   /   by Richard Eimers


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On that note, if at first you don’t succeed, don’t give up.
“Once you’re up against the competition, don’t get discouraged. It can take multiple offers on a home before getting accepted,” says Taggart. “In 2020, I had a client who put in 16 offers before they were accepted—it was a tough journey, but their persistence landed them the home of their dreams.”
For buyers looking to enter the market, Taggart says his best advice is to set a clear budget and stick to it. Make sure to include closing costs and down payments in those parameters, and be realistic about what you can afford.
Lower rates could help unleash more homes on the market
Anyone who has been looking to buy a home knows that the number of homes on the market has been consistently insufficient. So, in terms of supply, one outcome of lower rates is that it could help expand desperately needed new housing inventory—which has been rising every week for the past few months.
“That noted, roughly 80% of current mortgage holders are carrying a rate below 5%, so the descent in rates may not be enough to bring about a meaningful increase in inventory,” says Dougherty. “Many home sellers are also homebuyers, so stronger demand could place a ceiling on how much supply can improve.”
Pre-approved mortgage applications will start ‘waking up’
The best thing home shoppers can do is get pre-approved for a mortgage early, so that they are in position to act on that perfect house the minute it hits the market.
“Planning ahead and getting one’s buying power firmed up early will give a potential homebuyer a leg up on those that are just thinking of preparing themselves,” says Tan Tunador, a vice president and senior loan officer for Atlantic Coast Mortgage.
“A young couple reached out last week asking what they needed to do to get pre-approved, and when I looked them up, their initial application was October 2021. But when they had applied in 2021, they quickly gave up due to rates and the low inventory,” says Tunador. “Recent positive news about mortgages brought them back into the market, and they were happy that we could use their original application.”
Tunador helped them freshen up their original application with a new credit report and updated income and asset documents. Now they’re ready to go with a new pre-approval letter.
Buyers will trade the stress of high rates for the frustrations of a more challenging market
Once rates start to drop, it’s going to be a trade-off for homebuyers: rates versus competition.
“One of the most basic principles of economics is that when supply is limited and demand is heightened, the price of the goods increases,” says Taggart. “For buyers, we can anticipate increased competition that will drive up the prices of homes and make the homebuying process more stressful and difficult.”
In other words, homebuyers will find themselves essentially trading the frustration of having a higher mortgage rate for the frustration of competing in a more challenging market.
So, while a higher interest rate might be unpalatable, for some people it might still be the right move to buy a home now. That’s because waiting for a time when there is more competition could force potential buyers to consider risky moves like waiving a home inspection, adding an appraisal guarantee, and/or overbidding significantly to win a bid.
They can later refinance their loans, which can cost homeowners anywhere from about 2% to 6% of the amount of their new loan.
Bottom line for homebuyers: If you see a home you love, don’t wait
Given the market’s unpredictable nature, there might be better strategies than waiting for perfect conditions.
“In the face of uncertain predictions, buyers are advised to weigh financial preparedness and personal circumstances,” says Cassandra Happe, an analyst for WalletHub.
She advises homebuyers to consider lower-priced markets, prepare their finances for swift action, and vigilantly monitor listings.
“The key is to act strategically in this evolving market, Happe says. “Buyers should consider locking in deals at potentially lower prices now.”
“With the inventory of homes for sale still relatively low, finding the right home might still be the biggest challenge,” says Hale. “For that reason, if a shopper finds a home that fits their needs and is in budget, then it makes sense to move forward.”

  mortgage rates, home prices, home sales, housing market, property market

Beach Road Realty
Richard Eimers
17 Roundwood Drive
Inlet Beach, FL

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