The First Heritage Realty Blog
This Is the Sweet Spot Homebuyers Have Been Waiting For
After months of sitting on the sidelines, many homebuyers who were priced out by high mortgage rates and affordability challenges finally have an opportunity to make their move. With rates trending down, today’s market is a sweet spot for buyers—and it’s one that may not last long.So, if you’ve put your own move on the back burner, here’s why maybe you shouldn’t delay your plans any longer.As you weigh your options and decide if you should buy now or wait, ask yourself this: What do you think everyone else is going to do?The truth is, if mortgage rates continue to ease, as experts project, more buyers will jump back into the market. A survey from Bankrate shows over half of homeowners would be motivated to buy this year if rates drop below 6% (see graph below):With rates already in the low 6% range, we’re not terribly far off from hitting that threshold. The bottom line is, that when they drop into the 5s, the number of buyers in the market is going to go up – and that means more competition for you.That increased demand will likely push home prices up, which could potentially take away from some of the benefits you'd gain from a slightly lower interest rate. As Nadia Evangelou, Senior Economist and Director of Real Estate Research at the National Association of Realtors (NAR), explains:“The downside of increased demand is that it puts upward pressure on home prices as multiple buyers compete for a limited number of homes. In markets with ongoing housing shortages, this price increase can offset some of the affordability gains from lower mortgage rates.”So, while waiting to buy may seem like a smart move, it could backfire if rising prices outpace your savings from slightly lower rates.What This Means for YouRight now, you’ve got the chance to get ahead of all of that. Today’s market is a buyer sweet spot. Why? Because a lot of other buyers are waiting – which means not as many people are actively looking for homes. That means less competition for you.At the same time, affordability has already improved quite a bit. Recent easing in mortgage rates has made homeownership more accessible. As Mike Simonsen, Founder of Altos Research, says:“Mortgage payments on the typical-price home are 7% lower than last year and are 13% lower than the peak in May 2024.”And while the supply of homes for sale is still low, it's also higher than it’s been in years. According to Ralph McLaughlin, Senior Economist at Realtor.com:“The number of homes actively for sale continues to be elevated compared with last year, growing by 35.8%, a 10th straight month of growth, and now sits at the highest since May 2020.”This means you now have more options to choose from than you’ve had in quite a while.With fewer buyers in the market, improving affordability, and more homes to choose from, you have the chance to find the right one before the competition heats up.Why Waiting Could Cost YouIf you’re waiting for the perfect time to buy, it’s important to understand that timing the market is nearly impossible. The longer you wait, the higher the risk that market conditions will shift—and not necessarily in your favor. As Greg McBride, Chief Financial Analyst at Bankrate, says:“It’s one of those things where you should be careful what you wish for. A further drop in mortgage rates could bring a surge of demand that makes it tougher to actually buy a house.”Bottom LineDon’t wait until you have to deal with more competition and higher prices – you already have the chance to buy a home while we’re in the sweet spot today. Connect with an agent to make sure you’re taking advantage of it.
Buying Beats Renting in 22 Major U.S. Cities
That’s right—according to a recent study from Zillow, in 22 of the 50 largest metro areas, monthly mortgage payments are now lower than rent payments (see chart below):As mortgage rates have eased off their recent peak, home prices have moderated, and inventory has ticked up, affordability has improved significantly. When you add all of that up, it’s getting less expensive to buy a home than to rent one in many parts of the country.This is a big deal if you’ve been renting for a while now. But if you don’t see your city on this list, don’t sweat it. Things are moving fast, and your area might be joining these top metros soon.You see, talking with a local real estate agent about what’s happening in your market before this happens in your ideal neighborhood could really change the game for you. It’s all about being informed by a true expert, and understanding what was out of reach before might actually be getting more affordable than you think. Now, while this study compares monthly rent to principal and interest on a mortgage payment (not the whole monthly payment), let’s think through this. As Zillow notes, what you can’t ignore when you buy a home are things like taxes, insurance, utilities, and maintenance that should also be factored into your budget and your monthly payment.But remember – renters pay extra fees too, like renters’ insurance, utilities, parking, and more. And while doing the math may feel like a drag, this equation could be a much more exciting one to work through today.So, grab your calculator and your agent because the big takeaway is this: it may be time to determine if you’re in a spot to afford what you couldn’t just a few months ago.As Orphe Divounguy, Senior Economist at Zillow, says:“… for those who can make it work, homeownership may come with lower monthly costs and the ability to build long-term wealth in the form of home equity — something you lose out on as a renter. With mortgage rates dropping, it's a great time to see how your affordability has changed and if it makes more sense to buy than rent.”Whether you live in one of these budget-friendly metros where the scales have already tipped in your favor, or any town in-between, it’s time to connect with a local real estate agent to get the conversation started.With mortgage rates coming down and more homes hitting the market, you’ll want to be ready to jump back into your search – before everyone else does.Bottom LineIf you’re tired of renting and ready to find out what it takes to purchase a home in your area now that the landscape may be shifting, connect with a local real estate agent to do the math and see if buying a home makes sense for you now or sometime soon.
Buy Now, or Wait?
Some HighlightsIf you’re wondering if you should buy now or wait, here’s what you need to know. If you wait for rates to drop more, you’ll have to deal with more competition and higher prices as additional buyers jump back in. But if you buy now, you’d get ahead of that and have the chance to start building equity.Should you buy now or wait? Connect with a real estate agent and talk through it together, so you can make your best decision.
Don’t Fall for These Real Estate Agent Myths
When it’s time to buy or sell a home, one of the most important decisions you’ll make is who you’ll work with as your agent. That choice will have an impact on your entire experience and how smoothly it goes.As you figure out who you’ll partner with, it’s important to know what to expect and what to look for. Unfortunately, there may be some myths holding you back from making the best decision possible. So, let’s take some time to address those, and make sure you have the information you need to find the right agent for you.Myth #1: All Real Estate Agents Are the SameYou might think all agents are the same – so it doesn’t matter who you work with. But, in reality, agents have varying levels of experience, specialties, and market knowledge, which can have a big impact on your results. For example: you'll get much better service and advice from someone who is a true expert in their field. As Business Insider explains:“If you were planning to get your hair done for a special event, you'd want to visit a stylist who specifically has experience doing that type of work — you wouldn't make an appointment with someone who primarily does kids' hair. The same concept applies to finding a real estate agent. If you have a smaller budget, you probably don't want to work with an agent who exclusively sells multimillion-dollar properties.”Take some time to talk with each agent you’re considering. Ask about their experience level and what they specialize in. This will help you find the one that’s the best fit for your search.Myth #2: You Can Save Money by Not Using an AgentAs a seller, you may think you can save money by not working with a pro. However, the expertise, negotiation skills, and market knowledge an agent provides generally saves you money and helps you avoid making costly mistakes. Without that guidance, you could find yourself doing something like overpricing your house. And that’s a misstep that’ll cost you when it sits on the market for far too long. That’s why U.S. News Real Estate says:“When it comes to buying or selling your home, hiring a professional to guide you through the process can save you money and headaches. It pays to have someone on your side who's well-versed in the nuances of the market and can help ensure you get the best possible deal.”Myth #3: Agents Will Push You To Spend MoreYou may also be worried an agent will push you to buy a more expensive house in order to increase their commission. But that’s not how that should go. A good agent will respect your budget and work hard to find a home that truly fits your financial situation and needs. With their market know-how, they’ll point you toward the best option for you, rather than try to pad their own pockets on your dime. As NerdWallet explains:“Among other things, a good buyer’s agent will find homes for sale. A buyer's agent will help you understand the type of home you can afford in the current market, find listed homes that match your needs and price range, and then help you narrow the options to the properties worth considering.”Myth #4: Market Conditions Are the Same Everywhere, So Why Do I Need a Pro?Maybe you believe housing market conditions are the same no matter where you are. But that couldn’t be further from the truth. Real estate markets are highly localized, and conditions can vary widely from one area to another. This is why you can’t pick just anyone you find online. You should choose an agent who’s an expert on your specific local market. As a recent article from Bankrate says:“Real estate is very localized, and you want someone who’s extremely knowledgeable about the market in your specific area.”You’ll know you’ve found the right person when they can explain the national trends and how your area stacks up too. That way you’re guaranteed to get the full picture when you ask: “how’s the market?”Bottom LineDon’t let myths keep you from the expert guidance you deserve. With market knowledge and top resources, a trusted local real estate agent isn't just helpful, they’re invaluable.In what could be one of the biggest financial decisions of your life, having the right pro by your side is a game changer. Connect with an agent to make sure you get the best outcome possible.
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