It’s a seller’s market in Utah. Intense competition for a limited supply of homes has made getting into a home difficult. That leaves many prospective homebuyers intimidated and wondering, should I even try? We got some of Homie’s real estate pros together to discuss the market, buying strategies, and more. If you don’t have time to watch the full video, read some key takeaways below.
Is Now the Time to Buy?
This is the eternal question of the prospective homebuyer. Everyone wants to time the market right and get the best deal they possibly can. However, if the last two years have shown us anything, it’s that the market is unpredictable. The best answer to the question of whether now is the time to buy is that it depends. If you need a house now, then yes, it’s a good time to buy. Everybody’s situation is different.
If you need a home now, even if you’re a first-time homebuyer, then now is the time to buy. Even so, some people are scared of being upside down in their mortgage, or owing more than the value of the house, if the market crashes. If that’s you, ask yourself, “Would I regret it if I bought a house seven years ago?” That’s about how long the average person stays in their house. If the answer is no, maybe it is the right time for you to buy. Given current market conditions, it will probably take some more patience to get into a home. Make it an intentional decision. Don’t just buy a house to buy a house. Buy a house because you want a home, a place that you own.
As of the time of this post, supply is low and demand is high in Utah. Inventory has been slowly rising for a few months, but the demand will probably remain high. It’s unlikely that homes will get less expensive anytime soon.
Are Interest Rates Going Up?
There are strong indicators (inflation, etc.) that the Federal Reserve will likely increase the Effective Federal Funds Rate (FEDFUNDS) within the next year or so. There isn’t a direct one-to-one correlation between FEDFUNDS and mortgage rates, however, the Fed rate is still indicative of what mortgage rates will do. So mortgage rates will probably rise as well. They are not likely to skyrocket, but it may become more difficult to afford a mortgage if and when rates rise again.
If you have not refinanced your current home loan, and you’re not looking at buying, now may be a good time to do it. We can never predict where interest rates are going, but it’s pretty safe to say they’ll stay relatively low, from a historical perspective. We probably won’t see interest rates in the teens like we did in the 80s. The bottom line is that mortgage rates will probably go up in the near future, making now a better time to buy or refinance than later.
Are Home Prices Going Up?
We don’t expect home prices to go down any time soon, but competition may become less fierce. Instead of having 25 offers on a single property, we may only have five. We might see the housing market slow down a bit, but we don’t expect it to crash. More inventory has been added to the market in recent months, but demand is still high. The value of your home is, in all likelihood, going to increase. However, it might stabilize. Instead of 20% appreciation over one year, you might see 8%. No one has a crystal ball. We’re probably going to see adjustments in house prices in the future, but losing large amounts of value over one year–like we saw in 2008–is highly unlikely.
How do I Compete with Cash Offers?
Investors and wealthy individuals are coming into the market with all-cash offers, and it’s really difficult for the average homebuyer to compete. Cash is still king in real estate. Maybe you have a rich uncle, or maybe you invested in Dogecoin in its early days. Otherwise, it’s unlikely you have $450K lying around to go buy a house with cash.
What can you do to compete? Homie Loans™ recently released Homie Cash™, a program that levels your offer up to cash to help you win the house you want. Cash offers are up to three times more likely to get a home, and you can close on your home in as little as 21 days. Here’s how it works: Homie Loans™ advances a cash loan to a qualified buyer. The buyer uses the cash to purchase a home. Shortly after closing, the buyer refinances the loan into a long-term mortgage. Homie Cash™ can help you get the home you want and the mortgage to pay for it.
Homie Cash™ has already made a difference for several buyers. One buyer toured more than 20 homes and made three traditional offers well over asking price. All three offers were rejected. The first offer they made with Homie Cash™ was accepted. If you want to see if Homie Cash™ can help you get the home you want, get pre-approved today.