Strategies For Home Buyers In Today’s Market
Buying a home in today's real estate market is all about strategy. Sure, it may not be an ideal time to buy a home thanks to high home prices, low inventory, and interest rates higher than we're used to seeing, but if you can afford to buy a home today, you absolutely should. Trying to time the market will ultimately cost you time and money that you could have been gaining equity and enjoying a home that is all your own.
So, how should you approach buying a home in today's market? We have some ideas.
The market has slowed down
Interest rates and inflation have made it more difficult for most people to purchase a home, leading to a slowdown in the real estate market. However, if you are in a position to buy a home, the process should be much easier than it would have been a year ago.
Today's market has more flexibility for buyers than in previous years. However, that doesn't mean you can take your time or low-ball sellers. Inventory is still low in most areas, so homes are selling quickly. That means if you see a home you like, you should move forward quickly and, with the help of your Realtor, put together an offer that will work for the seller without forcing you to compromise on important terms either.
The seller's market is over
After the strongest seller's market we have ever seen, the tide is shifting in the buyer's favor. While we have yet to see home prices come down very much, there are other ways buyers can negotiate with sellers to save themselves some money.
One way to reduce your monthly mortgage payment, at least initially, is to ask the seller to pay for the buyer's rate buy-down. With this option, the seller will pay for discount points at closing, reducing your interest rate for the first few years you own the home. For example, in the first year, your rate would be 5.5%, in the second year, 6.5%, and in the third year, 7.5%. The hope is that rates will come down before the end of the third year, and you can refinance to a lower rate. In the worst case, you save thousands of dollars for the next three years while you get yourself settled into your new home.
Relief may be in sight
October's Consumer Price Index report shows that inflation is slowing, which hopefully means interest rates have hit their peak. Some economists are predicting the Fed will cut rates as soon as May of 2024, but don't expect to see the record low-interest rates we saw in 2021 anytime soon. Most experts are predicting rates will come down to somewhere around 6%.
The bad news is that once interest rates come down, we may see home prices spike since more people will want to jump into the market. So, if you're hoping to wait for rates to come down so you'll save some money, that might not be the case.
Let's get you into a house
We don't know for certain what the future holds for the New Mexico real estate, but we do know how to negotiate in today's market. If you are ready to buy a home, we are here to make it happen. Below is homes for sale
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Posted by Alfonso "Fonz" Salazar on
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