With mortgage rates rising, the homebuying market remains hot and very competitive, with inventory strains continuing to affect home prices.
Despite these challenges, if you are in the market for a new home, now is the time to act as prices and rates may continue to rise through at least the end of 2022. And if you wait, you will pay more for the same home later than you would now.
Finding the home you want will not be easy, but it is also not impossible.
Here are steps you can take to best position yourself to find—and successfully purchase—a new home.
Find the Right Lender
Many realtors have a roster of mortgage lenders they typically refer clients to, and that’s a great resource to have. However, a recent WSFS Mortgage survey found that only 22% of potential homebuyers in the Greater Philadelphia and Delaware region ranked having their realtor connect them with a lender as a top priority.
This reflects the importance of casting a wider net to find a lender whose mortgage options, including first-time homebuyer programs, best fit your needs. You should look for full transparency from your lender, including what your commitment will be for all upfront costs, which 60% of survey respondents cited as a top need.
Nearly half (46%) of those surveyed feel confident they can get the mortgage they want when they want it, and even more (52%) feel they know what steps to take to find the right home in today’s market.
Those steps should include working with your lender to ensure all your finances are in order to help you lock in the best rate possible, how much you are pre-approved for, and what a realistic max spend is if you find yourself competing for a home.
Find the Right Realtor for YOU
Even the most seasoned homebuyers should use a realtor in this market to help them narrow their search and keep on top of newly available properties. Even with popular home search websites and apps available at your fingertips, a realtor who knows your buying area well and has a wide net of contacts and relationships can be invaluable in your search.
On top of that, your realtor can manage the juggling of multiple offers on houses, an approach you may need to embrace if bidding wars persist.
Take a Hard Look at Wants vs. Needs
In this competitive environment, virtually everything has changed from the homebuying market we were in pre-pandemic.
While the pandemic did motivate many people to remodel or upgrade their homes for more space, inflation has joined forces with rising home prices to make these options increasingly difficult.
Many companies that operated remotely during the pandemic are now returning to various degrees of home and office working environments, while countless frontline and essential employees have been going into their work locations all along.
This shift could open new possibilities for homebuyers who have some flexibility in what they want in a home. Nearly half of potential homebuyers surveyed said purchasing a move-in ready home was a top priority, which could leave homes that may need a little TLC, but not necessarily a full remodel, available for buyers willing to roll up their sleeves or take a patient approach to modifying a new home just how they want it.
By taking these measures, you can confidently bid on homes knowing your entire homebuying team has your back, has prepared you to be as attractive a buyer as possible, and is ready to act quickly on your behalf.
Helping you boost your financial intelligence.
Read our financial resources from your friends at WSFS.