The housing market is hot and is continuing to heat up as we enter one of the busiest seasons for homebuying. If you are looking to purchase a home this year, here are a few real estate trends and tips to help you navigate the homebuying process.
It’s still a seller’s market.
This is good news if you are selling a home, but tough for those who are looking to buy—and we don’t see this changing anytime soon. The impact of ongoing low inventory and high demand continues to drive prices to record levels, a problem that won’t fix itself overnight. Additionally, construction materials are considerably higher than they have been in years past, which means less new homes are being built, keeping the cost of existing homes high with less competition from new builds. Unfortunately, we believe this is our new reality through 2022 and likely into next year.
Interest rates will likely remain steady through the year.
Rates have spiked significantly over the past 45 days but are still low historically speaking. One thing to consider is that rental rates are also increasing so overall housing costs are going up whether you are renting or buying. Also remember you always have the option of refinancing your loan later if rates fall in the future.
The price of rent is rising almost as fast as interest rates—which is pushing many renters to consider purchasing a home. If you’re able to find a home in your budget and that meets your needs, it’s still a good investment to purchase a home, despite the current environment. Homeownership continues to be an excellent hedge against inflation and has proven to be a solid financial investment through all economic times.
Leveraging local lenders and realtors can make a positive impact.
It doesn’t cost to have a buyer’s agent, and it’s always advised to get prequalified with a reputable lender. With Reno real estate being a hot sector and houses selling almost as fast as they go on the market—having a realtor with knowledge of the market and relationships with other realtors can benefit you in the long run as you navigate through the home buying process. In some cases, taking out a loan with a local lender can also look more favorable for the sellers and realtors involved in the contracts and negotiations.
The pandemic is shifting where people are buying.
With many people working remote full-time or with a hybrid approach, we are seeing some people expand their geographic radius. Before the pandemic, many were tied to a specific city or urban area as a center for business for work. Because of this, commute has been a key consideration when home buying. With the shift in remote work, many buyers now have great flexibility without being tied to a certain location. Whether that is outside of the city limits or thousands of miles from their work headquarters, we anticipate this change will continue to evolve and impact how buyers approach home purchasing.
While purchasing a home in today’s housing market may seem overwhelming, remember that it’s still a good investment to purchase a home, despite the current environment.
Matt Locke is the national mortgage sales manager at UMB Bank.