Days are hot, but the housing market has cooled. While significant increases in new listings coming on the market, accompanied by slowing sales would normally be giving buyers some relief, the Fed’s rate hikes are not, acting as an AC on the housing market.
Many sellers seeing an increase in market time are making price improvements to woo rate-worried buyers.
Does that mean that as a seller or buyer you are out of luck? NO! Rising interest rates are slowing home appreciation and have flattened the market for both sides. Managing your expectations is key.
Home prices are predicted to continue to rise, but at a slower pace than the hyper competitive market seen during the pandemic.
Lenders offer many options to help home purchases. It is very helpful to sit with a lender and look at all your choices as a buyer and what that looks like long term. Adjustable-rate mortgages are making a come back to help with the rate increases. This option gives you a lower payment in the beginning, which increases over time as your income usually goes up.
Beginning July 10, Freddie Mac will accept on-time rent payments in their loan underwriting system. This will help responsible first-time homebuyers who lack credit scores or have limited credit history to purchase their own home.
Sellers need to prepare for longer market times and be aware that the multiple offers and over bids have decreased as the rates have moved higher. Contingent offers may be on the table as well. Your Realtor is your best source on the ever-changing market and will help you navigate the sale of your home as smoothly as possible.
Karen Domnitz is Realtor DRE# 00897503 with Century 21 Award and vice president of the Ramona Real Estate Association
