Just as homebuyers have learned to navigate soaring prices, sinking inventory and bidding wars, the housing market has reached a new level of madness. Will it all boil over this spring?

The impact of rising mortgage rates
Mortgage rates have been on the rise this year, with 30-year fixed-rate mortgages reaching a two-year high and shooting past four percent in mid-February.

Although statistics show the cost of borrowing is lower than ever, those small increases can negatively impact a buyer’s budget or even knock them out of the game altogether. Although the rise in interest rates has caused some homebuyers to rethink their plans or scrap them altogether, agents said an anticipated rise in interest rates has motivated the majority of their clients to act now.

Bidding wars are heating back up, and inflation isn’t helping
After nearly two years of a nonstop rapid-fire sales pace, the return of seasonal buying trends during last half of 2021 offered a slight reprieve for some homebuyers as median home price sales growth slid 1.3 percent year over year to 14.6 percent, according to the National Association of Realtors. Although inflation is part of the conversation, it hasn’t been enough to stop buyers from staying in the market since they see real estate as a way to protect their long-term financial security.

The catch-22 sellers must face
Thanks to scant inventory and booming demand, homesellers have been riding high throughout the pandemic as seller profits reached a 13-year high of $94,000. Most homesellers have had to do little work to get their abodes off the market, with agents reporting sellers opting out of staging, making home upgrades or extensive marketing since buyers are signing contracts in as little as one day.  However, it hasn’t been all peaches and cream for homesellers. The profits of homeselling come with the risk of failing to find a new home that fits their needs and pockets.

What about war?
Beyond a topsy-turvy economic landscape, homebuyers and homesellers also have begun to think about the escalating conflict between Russia and Ukraine. Although the invasion proved to be a buoy for mortgage demand as rates declined last week, economists say the conflict could result in higher rates by the end of 2022.

As some buyers decide to wait for a bubble or slowdown, agents have to help them accurately weigh the risks and benefits of that decision. It’s hard to time the market.  

How long do you plan to stay in your new home? If the answer is any less than five years, think about waiting as the rigmarole of moving through this kind of market might not be worth the equity gains you’d see in two years of owning a property.

Are you going to be in the house for five years or more? If the answer is yes and you can afford the payment, then you should totally buy right now.

Contact us at (480)205- 2234 to get preapproved for mortgage while you look for the property of your choice. We can get you the best rates available and also discuss the loan choices that best meets your needs.