Will you be shopping for a home this spring? If so, a little preparation now can pay big dividends later. Let’s see what the experts say about home buying tips in Spring 2022.
Few things are as exciting – or can be as stressful – as entering the home buying market. This year, competition will remain high and prices will continue their upward trajectory. Of course, so will rent prices, which makes home ownership a very attractive option. What should home buyers expect going into this spring and summer?
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Once again, prospective home buyers are up against a hot housing market, with low inventory and high prices. Because the demand for houses continues to grow, Realtor.com called the Spring 2022 housing market ‘miserable for homebuyers’ – but not impossible. The above factors may discourage some buyers from entering the market right now, which means bidding on individual homes may be less intense. However, if you sat out the 2021 real estate market hoping for a change, don’t expect to see much difference in Spring 2022.
In addition to rising house prices, mortgage rates are increasing (in a bid to stem inflation). All this adds up to a bigger monthly mortgage payment for new buyers.
Referencing a Fannie Mae forecast, Fortune.com states that home prices will rise by 10.8% this year. Not only will that add to your home loan, it also translates into bigger downpayments.
The first two items on our list aren’t great news for home buyers, but they don’t have to be a deal-breaker. If you do your financial homework and get a mortgage preapproval, home ownership can still be within reach.
Before you even start home shopping, sit down with your budget and figure out the monthly payment you can afford. Make sure that any money you’d use for a downpayment isn’t tied up in some way, and clean up your credit score by paying down debt. It’s a good idea to pull all three major credit bureau reports and make sure they’re accurate, too. Finally, check out your state’s home-buying programs, which may offer things like downpayment assistance.
Although major cities and metro areas have long been prime real estate, consider looking at homes in mid-size and smaller cities. A report by the Wall Street Journal & Realtor.com on emerging housing markets states that these traits are often shared by the country’s emerging housing markets – along with things like a great quality of life, sunny weather, and plenty of amenities. If you really want to maximize your housing dollar, small towns and rural areas will often get you the most bang for your buck.
You may also need to be flexible on the features your new home has. If you can live without a few luxury options, you might be able to afford a home even in this tight market.
In Spring 2022’s housing market, anything that can save you money or extend your budget is an advantage. So, make sure you understand all your mortgage options – home buyers who don’t qualify for a traditional loan might be able to afford one of these non-traditional mortgages. At Mortgage 1, we’ll help you understand what’s available and what works best with your budget.