The past year-plus has been a perfect storm for a volatile housing market. Interest rates dropped and stayed low, prices rose, and inventory became scarce, shutting many would-be homebuyers out of the housing boom.
However, as we start seeing home prices stabilize and inventory increase in some areas, it may be a good time to jump back into the market—especially if you are currently renting. According to Realtor.com, it may be more affordable to handle the monthly costs of buying a home than renting in many parts of the country, including the Greater Philadelphia and Delaware region, where it may be as much as 9% cheaper to own a home based on July 2021 data.
Neighborhood inventory may vary and while rates remain low, they are beginning to rise, so if you were shut out of the homebuying frenzy, now may be the time to renew your search.
Here are a few tips for getting back into the homebuying market and finding your new home.
First-time Homebuyer? Assemble Your Team
Even with the market stabilizing, it is still quite competitive. If you are a first-time homebuyer, the process for getting your financials together and weighing home options such as location, schools and what you can reasonably afford can be daunting.
If you’re ready to jump back into the housing market, your first step should be building your team.
Ask friends and family who have recently bought or sold a home for realtor recommendations. When it comes to finding the right home at the right price that best meets your specific needs, a trusted realtor can make all the difference in your experience and ultimately, your success.
Your realtor may also have a mortgage lender they like to work with and can recommend, but it’s important to ask for options so you can determine the best fit for you.
Choose a lender that will take the time to explain the various mortgage loan options, available government options, affordability, fees and processing costs, impact of the size of your down payment, closing costs and more.
Then, work with them to get prequalified so you can start working with your realtor to identify homes in your price range.
Make Yourself an Attractive Buyer
Whether you are buying a home for the first time or looking to upgrade from your current home, making yourself an attractive buyer to sellers (and their realtors) is key.
In many cases, realtors won’t show a home to a potential buyer unless their prequalification is in the same range as the asking price, so make sure you are shopping within your means.
Additionally, make sure your personal finances are as buttoned up as possible, including paying off or reducing balances on credit cards and keep your bank accounts flush with cash.
When you do decide to make an offer on a home, make sure you have a plan in place with your realtor in case other potential buyers submit offers too.
Remember that although inventory is improving, competition remains in many areas so being prepared to up your offer or have escalator clauses in place could be key factors in a successful home search.
Have a Temporary Housing Plan
If you are selling a home while also looking to buy a new one, or renting while looking for your first home, it’s important to have a place to live temporarily if the closing process takes a little longer than you expected, as closings can take 30-60 days, or even longer if the seller isn’t quite ready to move out yet, among many factors and reasons.
This is especially true for current homeowners in case their house sells before they find or close on a new home. And renters must also factor in lease agreements and landlords’ timelines for re-renting as they look for a home to buy.
If possible, discuss options with family or friends to ensure you have somewhere to stay temporarily in case you need to move out of your current residence before closing on your new home.
Each person’s journey to home ownership is unique but preparing in advance with these steps can help make your homebuying experience a successful one.
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