It's no secret that home-buying conditions are a bit challenging right now. But if you're thinking you might be in the market to buy a new home sometime soon, you might be wondering when the best time to buy will be. Whether it's your first home or you're just looking to make a change, here are some of the factors you should consider when making your decision.
1. Inflation and Increased Interest Rates
In order to curb inflation, the Federal Reserve has been raising interest rates steadily for the last few months. The Federal Reserve doesn't have control over mortgage rates, but these increases can have an impact on mortgages. Hikes will cause an increase in prime rates and financing costs. Higher interest rates on mortgages will make homes less affordable and impact your overall budget. On the plus side, the benefit of increased interest rates is that consumers looking to save money for a home will earn more on their deposits.
2. Home Prices
How homes are priced will also have an impact on your entire home-buying process. The Fannie Mae Economic and Strategic Research Group anticipates decreases in home price growth over the next few years due to higher mortgage rates and the current state of the economy.
3. Options Available on The Market
Right now, it's definitely a "seller's market" across the United States. This comes as a result of the high demand for homes and low supply on the market. There's a lot of competition for homes for sale in LA, which causes there to be fewer choices, high home prices, and very quick sales. Overall, there are more people interested in purchasing homes that are available, so this can make right now a very difficult and frustrating time to purchase a home. In the long run, you may end up settling for something you're not really in love with.
4. What Will The Market Look Like In the Future
According to recent surveys, 44% of respondents say that home prices will go up in the next 12 months. 27% believe they will go down, and 23% feel they will stay the same. Although it can be hard to predict what will happen to the market over time, one promising fact is that the number of Americans who think prices will go up has decreased by 7% in the last few months. Conversely, the percentage of people who believe mortgage rates will decrease over the next year has increased by 4 percent.
While higher interest rates, increased home prices, and an unstable housing market can make the home-buying process a challenge, whether you decide to purchase a new home in 2022, 2023, or even 2024 is completely up to you. The best time to purchase a new home is different for everyone, so it's important to consider your finances and the overall impact the purchase of a new home will have on them before you jump in.