Why is it so hard to buy a house right now?
Thinking of buying a house? So is everyone else.
Why are homes so hot?
Mortgage rates have risen slightly in the past few months, but are still near record lows, driving high demand for homes. Some people hope to capitalize on these low rates, while others want to upgrade to a larger space while working from home.
Call it the “pandemic shuffle”. Many people who weren’t planning to buy are suddenly in the market because they want to take advantage of the low rates. Home inventory is also low, and fewer homes means higher prices. The number of homes for sale dropped more than 20% in March 2021 compared to 2020. On top of that, COVID-related construction delays and rising costs have homebuilders struggling to keep up. (If you didn’t know, the price of certain raw materials like lumber have soared over the past year.)
Spring is typically home-buying season, and a combination of many potential buyers and few homes for sale has created an extremely competitive market. Real estate brokerage Redfin reported almost half of homes are selling within one week of hitting the market, which often means bidding wars.
So is it impossible to buy a home?
It’s difficult, but not impossible. Here’s a few tips to get an edge in the market.
Be realistic. Make sure you are looking for homes you can actually afford. It’s easy to get caught up in a whirlwind of bidding, but don’t offer up money you don’t have. Due to the competition, you may have to bid higher than the asking price on a house, so keep this in mind when evaluating your savings. Use a mortgage calculator to determine how much your monthly payment will be, but keep in mind there are lots of hidden costs that come with home ownership, like homeowners insurance and property taxes.
Get your finances in check. It’s a good idea to clean up your spending a few months prior to applying. If you’re worried about your credit score, here’s a couple of ways to boost it in 30 days or less.
Go for a big down payment. Making a larger down payment can decrease the size of your mortgage loan. If you put down at least 20% you’ll also avoid having to pay for private mortgage insurance, but you may want to consider offering more.
Green Country offers home loan options with no down payment – you can apply or get pre-approved online. Start the application at www.GetHomewithGreenCountry.com.
Start the process early. Get pre-approved before shopping, which shows sellers you’re serious about buying a home.