"Brent did an outstanding job with my loan experience. Teaches me a lot with what option were available and advantages. Couldn’t be more impressed with his work and advice. Highly recommended."
tiger nate
Hello,
Are you a buyer that is on the sidelines, waiting to purchase a new home OR have been delayed from entering the real estate market? If so, I'm sure your reasons could be valid, but, in order to best educate to ensure you are in the right position, I want to ensure you have all the information on whether this is a wise course of action. The main issue, I assume, would be " affordability " from the significant rise in rates which has lowered your buying power or may have even knocked you out of qualification. You might think this is a negative, but I wanted to highlight this exact issue and show you that it is an excellent thing for you as a potential home buyer.
In the video presentation above, I've laid out the domino effect of the increase in the rates on the real estate market, which now allows you opportunities that have not been present in the last few years for home buyers. Both the lack of affordability and inventory is an exciting and challenging dynamic in this market, making it completely different from past markets. What I mean by that is that usually, these two forces don't line up together in this magnitude.
For example, when affordability issues last crept into the market, the housing supply spikes with the pullback of buyers, which we experienced recently in 2018/19. The main issue that has caused a much-needed pause in our housing market has been the spike in rates, which also caused our affordability issues. So, we should focus on the opportunities that this presents you as a home buyer now vs. just six months. Here's a synopsis...
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Six to Twelve Months Ago: Buyers competed against multiple offers per property, sometimes 10+ offer per property. Buyers had to release all loan, inspection, and appraisal contingencies. ( More risk) Buyers had to convert their loans into " cash offers " to compete. Buyers had to overbid on their offers to compete. Buyers had to settle on whatever home came on the market. Buyers are being delayed in converting their " cash overs " into loans in this high-rate environment.
Today: Fewer Buyers, which means less competition. Buyers can write offers with, and maintain, their contingencies. Buyers with minimum down payments can purchase again. Buyers have more choices of homes than buying whatever comes to market. With help from lenders like me, we can structure much better terms, like buying down the rate which makes buying NOW the right choice IF you have the right strategy....
All this being said, some markets and some neighborhoods are still very competitive and sellers are still not willing to negotiate. In an already low inventory environment, this will only get worse in the Spring/Summer when more buyers come into the market as interest rates continue to fall. We can solve this issue by using a better strategy to buy property today... but the window will not stay open for long and we'll be right back in a seller dominated market. As always, the one with the best strategy wins... I'd love to help you!
Brent Willis, CMPS
NEO Home Loans