Home-Buying Power is Back!
Volatility in the economy and housing market is filled with mixed signals. Momentum has shifted over the last six months. Last spring we were helping buyers understand escalation clauses as multiple offers and rising home prices fueled the Bloomington housing market. Today, we’re seeing home values easing and inventory rising. That’s encouraging news for homebuyers.
The latest interest rate hike has some homebuyers fretting. Despite recent increases, 30-year mortgage rates are still below their historical average of nearly 8%.1 At the same time, rents have been inching upward steadily for years. If you’re renting in Bloomington, you should consider buying a home in today’s more favorable climate for buyers.
1 Source: bankrate.com
Sterling Real Estate suggests are a variety of ways that homebuyers can navigate today’s market.
- Improve your credit score: Borrowers with good credit and strong finances often qualify for mortgage rates that are below the industry average. Do this by:
- Paying down credit card debt
- Pay all recurring debts, including utilities and car payments, on time to maintain your score
- Refrain from making large purchases, e.g., cars, boats
- Shop mortgage rates: Ask your Realtor for trusted lender referrals
- Consider an adjustable / variable rate loan: This may be an ideal solution, especially if you don’t plan on staying in the same home for more than 5 years
- The difference between a fixed rate and an adjustable rate mortgage is that the interest for fixed-rate mortgages doesn’t change throughout the terms of your loan. With an adjustable rate mortgage, the interest rate may go up or down.2
- Buy down a percentage point:
- As part of the negotiating process, ask the seller for credit in lieu of closing costs, or a seller credit to buy down a percentage point of your mortgage loan rate.
- Get Smart
- Meet with a lender to find out how much home you can afford, and get pre-approved before you start your home search.
2 Source: Consumer Financial Protection Board
In a buyer’s market, sellers must try harder to sell their homes because there is more supply than demand. There are many things you can do to make your home more attractive to buyers without spending much. Reach out if you’d like to discuss listing your home.
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