The Real Estate Market Is Changing!

Less than 2 months ago we were in a strong “Seller’s Market”, and it was hard for the average home buyer to snag a home. With the increase of families moving to the DFW area, first-time home buyers, and current homeowners considering up-sizing or down-sizing was a challenge. Multiple offers were submitted to home sellers within minutes waving the option periods, appraisals, inspections, home warranties and even offering free leaseback to the sellers; not to mention knowing to even be considered a buyer would be paying from $20,000 plus over appraisal value. Houses were selling within hours after hitting the market. This forced some home buyers to get out of the homebuying madness and consider renting.?In some cases, the stress of not winning contracts for their clients some real estate agents got out of the business as well.

?Then around March 3, 2022, the mortgage interest rate jumped from 3.76% to 5.81%. It was predicted that the interest rates would slowly go up during the year, but the Federal Reserve decided differently. These quick transitions caused a quick panic in the market. While there were new jobs created some were in jeopardy of losing their jobs, which cause the average home buyers and sellers to live in uncertainty. There was a brief cooling-off period for buyers, sellers, and renters. Some decided to stay put instead of making a move to buy or sell, while other just moved forward.

“No need to panic, we have been here before. First-time homebuyers have not experienced these quick changes, but their parents have. How quickly we forget.”

We have seen interest rates rise and fall before, the only thing we have not seen was the historically low-interest rates that were caused by a pandemic we had never seen before called Covid19. ?In 2008 interest rates were 6.03%, and in 2012 the mortgage interest rate was 3.66%. The highest interest rate in history was in 1981 with rates at 16.63%, according to Freddie Mac. But there is one thing that has remained the same and that’s the American Dream of homeownership. Homes will continue to be built, purchased, and sold.

When I’m asked the questions, how is the market and when is the best time to buy or sell a home? My answer is always the same, “Now”. Waiting will only ensure your interest rate may or may not change, but home values will always increase. The home you purchased 2 years ago is worth quite a bit more in today’s market.

Today, things are settling down and we are moving toward a “Buyer’s Market”. There are more homes available which give homebuyers more choices. Buyers can feel comfortable making their offer closer to the list price, with option periods, and inspections. Homes are on the market a little longer because the urgency of missing out is somewhat less. The decision to buy vs. rent has become easier.

We will get into the higher cost of renting at another time because there is a lot to say about the pros and cons of renting. But for now, this is a welcome change.

No Need to Panic! Marry the Home and Date the Interest Rate! You can always refinance.