I Need to Buy a House and Sell a House.

What Should I Expect?

So, you’ll be buying a house, and you have one to sell.

It doesn’t sound like you have a choice in the matter. You’re not the only one … many home sellers are faced with this dilemma.

In this edition of Sprocket Realty’s monthly newsletter, we’ll take a look at the current housing market, the escalating mortgage interest rate, and address the question, “What if there’s a recession?”

It’s not all gloom and doom, but if you watch TV news, you might think so.

As long as you know what to expect, you can get your ducks lined up.

The current real estate market.

Right now, consumers are pessimistic about the housing market in general. And for the most part, homebuying conditions are what gives them the most anxiety.

According to the Fannie Mae Home Purchase Sentiment Index, 66% of consumers believe now is a good time to sell, but less than 20% think it’s a good time to buy (Fannie Mae).

The shortage of homes for sale has caused prices to rise, a simple case of supply and demand.

Mortgage rates, unfortunately, are rising at the same time due to rampant inflation and the Federal Reserve’s attempt to get it under control.

It makes for a discouraging time to buy a home and the numbers reflect that fact. (Mortgage News Daily)

New home construction, while reducing some market pressure, hasn’t caught up with demand due in part to the cost and availability of building materials as well as labor shortages. (Premier Construction Software)

Mortgage interest rates are still rising.

According to Freddie Mac, mortgage rates have reached their highest level in nearly 23 years.

As of this writing, the 30-year fixed-rate mortgage (FRM) average is 7.31%.

“The 30-year fixed-rate mortgage has hit the highest level since the year 2000,” said Sam Khater, Freddie Mac’s Chief Economist. “However, unlike the turn of the millennium, house prices today are rising alongside mortgage rates, primarily due to low inventory. These headwinds are causing both buyers and sellers to hold out for better circumstances.”

A year ago, the 30-year FRM averaged 6.70%, a substantial gain year over year.

Keep in mind, the current 7.31% rate “is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit.”

If that’s not you, expect your rate to be higher.

Note: Last year, when Freddie Mac’s weekly average 30-year FRM hit 7%, that marked the first time it had been that high in two decades. (Realtor.com)

What if there’s a recession?

Something none of us want to think about is the dreaded “R” word … recession.

Yet, the likelihood of one must be factored into any major financial decision.

According to Fannie Mae’s Economic and Strategic Research (ESR) Group, “a modest contraction remains the most likely outcome.”

Realtor.com writes that most experts believe we’re in for a time of continuing change.

“The stock market and the real estate market are going to be volatile,” says David Sacco, an economics professor at the University of New Haven in Connecticut.

Here’s why you should buy/sell now.

Don’t start wringing your hands/clutching your pearls/counting your chickens just yet.

If you have good credit, can qualify for a mortgage, and need to buy a home, now may be as good a time as ever (well, almost) to call your agent.

Interest rates are continuing to rise. So are housing prices.

Available homes to buy will not be plentiful for a while. People who have low interest rates by today’s standards aren’t interested in getting out of those mortgages and into ones that could be twice what they’re paying now when they get the mortgage that comes with the new house.

A large portion of homes for sale are on the market because of life changes … a new job in a different city, marriage or divorce, birth of a child or death of a spouse, financial or health issues.

There just isn’t the availability we saw only a couple of years ago.

But … if you can find a home you love, you may be able to get it at a price that will be more affordable than it will ever be again. While prices in general do come down, that’s the exception, not the rule.

Typically, mortgage rates drop which brings more buyers into the market, driving home prices higher.

There’s no reason to think that won’t happen again, and again.

And when it does, you can refinance as long as you still qualify.

As Melissa Cohn, regional vice president of William Raveis Mortgage in Connecticut recently told her newsletter subscribers, “Remember, you marry the house and date the rate.”

Things to think about.

You have a lot to consider.

Here’s what we know …

• Things aren’t getting any better.
• Mortgage rates haven’t been this high in 20 years and it looks like they’ll keep going up.
• Housing inventory is low, both new and pre-existing.
• The number of people in the market is low because they believe it’s a bad time to buy due to market and economic conditions.
• New home construction hasn’t kept up with demand and it could be a while before it does.
• Many economists believe we may be heading into a recession but they disagree on how bad it could get.
• If you need to buy and have good credit, there may be no better time than now.
• If you get stuck with a high mortgage rate, when they come down you can always reapply.
• You marry the house and date the rate.

Are you ready to test the water? Do you want to see what your options are?

I’d love to show you how you can take advantage of a down market and get into a new home now.

This is not a fantasy. Just click on the link below and we’ll get started.

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