It may be time to put your plans on hold.
- Mortgage rates and home prices are soaring.
- Housing inventory remains limited, leaving buyers with few options.
- If you’re hoping home prices will come down, you may need to pause your search for a while, even if inventory opens up soon.
It would certainly be fair to say that 2021 was a tough year to buy a home. Last year, inventory was extremely sluggish, and home prices were sky-high.
Today’s housing market is comparable, only with one key difference — mortgage rates are now through the roof. Whereas it was more than possible to borrow affordably for a home in 2021, since the start of 2022, mortgage rates have risen sharply, to the point where they’re now at their highest level in over a decade.
If you’ve been struggling to buy a home, you may be reaching your breaking point. But is it time to call it quits? Or should you keep up your house hunt?
Inventory could pick up
Although housing inventory is sluggish right now, listings could pick up in the coming months. First, the spring season is when we typically see an influx of new listings, and this year might follow that pattern.
Also, it’s clear that mortgages are getting less and less affordable by the week. Some sellers may opt to speed up their listing plans to get in at a time when buyers aren’t totally turned off.
If inventory does indeed pick up in the near term, it could lead to less competition. That means fewer bidding wars and, ideally, fewer scenarios where you’re forced to make an offer above asking price.
But for the most part, you shouldn’t expect borrowing to get less expensive anytime soon, and you shouldn’t expect home prices to drop substantially. They might gradually start to come down if inventory increases, but there’s no reason to anticipate a drastic drop.
As such, if affordability is your main concern right now, then it may be time to give up on buying a home in 2022, since that situation is unlikely to change for the better anytime soon. But if a lack of available homes has been a bigger sticking point, then it may be worth keeping tabs on the market and seeing if listings pick up. If they do, and you can afford a home …….