Other than green grass, longer days and blooming flowers, here are a few more things that you can expect to see this spring when the housing market wakes from hibernation.
First off: Rates are gonna rise.
Because the Fed recently raised rates, and said they will raise them at least 5x more this year, now is the time to take action if you’re thinking about a home purchase or refinance. Waiting means that you’ll most likely pay a higher rate on your mortgage, which increases your monthly payment, and that can really add up over time during the life of your loan.
Right now, rates are still low, hovering around the 5% range, but they are likely to climb higher before the end of the year. And, because there are tensions in the world that are having a big impact on global markets, rates are likely to climb even higher than originally predicted. The good news here is that, compared to the industry averages of the last 10-20 years, rates are just a pinch higher than their all-time lows, like what we saw in 2021.
Next up: The seller’s market will remain strong.
Home values continue to appreciate. Because prices are determined by supply and demand, and buyer demand remains strong, there will continue to be some fierce competition for homebuyers. If you want to be on either side of the closing table this spring, expect multiple offers and bidding wars that will go above and beyond the listing price in many transactions.
If the seller’s market holds like it’s predicted to, and buyers are paying above the appraised value of a home, these prices become the new comparable range, or comps. And that pushes other sellers to follow suit. We’re unsure if we’ll see a natural correction in this over the course of this year, or if these levels of home prices will stabilize. But, we do know that if you’re interested in selling your house, now is a perfect time to make it happen. If you were thinking about moving because you want an updated home, or a larger one, and you’re finding it hard to land the perfect place with such fierce competition, consider creating the home of your dreams with a renovation loan. That way, you get exactly what you want, you don’t have to go through the process of moving, and you already know the location you’re in.
Lastly: Inventory will be a hot commodity, but you will see more options come on the market.
If you heard from friends or family that it’s hard just to get a showing of a home before it’s sold, or had this experienced first-hand yourself, you can expect that to continue for now. The positive thing about springtime in the housing market is that this is a time of year when many more people who are considering listing their home for sale actually do it. So, while inventory will remain tight, you will still have a better chance of getting your dream home than you did in the previous months before.
That’s also shown on a report recently release by the National Association of Realtors announcing that March’s inventory had increased for the first time in eight months. Since spring is the busiest time of year for the housing market, the next 90 days should give us even more listings. Just be prepared to still act quickly if you see something that you like, because it won’t hang around for long.
The bottom line
For this spring, keep in mind that rates will continue to rise; the seller’s market will remain strong; and inventory is tight, but you will still see more options come on the market than you have in the last eight months.
This is not an offer for a loan or any type of extension. Eligibility for a loan or extension of credit from Homespire Mortgage Corporation is subject to completion of a loan application, credit, income, and employment qualification, and meeting established underwriting criteria. Rates are subject to change without notice based on market conditions. See Loan Consultant for information on program income limits, buyer contribution, area median income, debt requirements, and other application details.