While holding off on making your home purchase can give you extra time to save and plan, there’s something to be said for striking while the iron is hot if you find that outstanding deal on your dream home. Let’s take a look at the bigger picture across the real estate industry to better understand how waiting to buy could cost homebuyers in Newark:
One of the perks biggest buyers have been able to take advantage of over the last couple of years is the historically low home mortgage interest rates.
This has been an intended effect of the actions from the Federal Reserve’s determination to try keeping these interest rates as low as possible in order to stabilize the markets and keep them running smoothly. This has resulted in a spectacular period of time for buyers to lock in low interest rates with their lenders for new loans or refinances.
However, the Federal Reserve has been eyeing the strong possibility of increasing these interest rates to curtail inflation, and that means waiting to buy could cost you a lot in interest.
Throughout the COVID-19 pandemic, the number of homes for sale has fluctuated wildly in local markets compared to their usual annual moving average due to a number of factors.
The two largest reasons for the low inventory numbers have been the ping-ponging comfortability with going out in public and visiting strange places and the major uptick in homeowners refinancing to cash in on the low-interest rates without finding and moving to a new home. We have reached a point in the global pandemic where consumer comfort and confidence in dealing with the virus is quite high, and this means more homes are being put up for sale.
The temporary increased inventory has helped to put a check on the near out-of-control bidding wars that have characterized the past year or so, but it’s unlikely to last.
Increased Buyer Competition
Buyers have come out of the woodwork and are searching for new homes with limited inventory that is likely to decrease over time.
In many cases, these buyers have been saving additional income they would have normally spent on other activities in anticipation of the market opening up and giving them an opportunity to swoop in on their ideal home. Combined with the increased savings are increasing rents as landlords look to make up for some of their losses over the last couple of years while also keeping pace with the burgeoning real estate markets. This is going to lead to more renters searching to become buyers over the next year or two, and thereby create more competition across the board.
More buyers and more competition mean an increased likelihood for bidding wars that carry the potential to rapidly get out of hand, so waiting to buy may cost you more in the long run.
Lastly, all of the previous points are going to become exacerbated as the weather warms up heading into spring.
Spring is traditionally when local markets heat up alongside the weather, and you can expect temporarily higher inventory, a massive influx of buyers increasing competition, and the greater potential for increased interest rates all culminating in a more expensive homebuying experience. Housing shortages are not new in the United States, but their existence is only going to be made more obvious as spring rolls around and buyers send the market values of homes soaring once again.
Getting out ahead of the competition now and moving when it may be inconvenient could save you a bundle down the road.
Help to Avoid Waiting to Buy in Newark
If you’re concerned about waiting to buy a home in Newark and want to get a jump on things, contact our team today at (848) 299-4847!