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As we enter the second half of 2022, we’re bringing you another mortgage market update. In June, we discussed affordability, inventory, rates, and housing bubble concerns. This month, we’re focusing on what you can do to succeed in this challenging market.
New and pending sales saw a national uptick this past May, despite expectations of rising rates. Inventory has increased as home sales cool and more sellers enter the market. Many sellers feel that now is a comfortable time to list because the rise in home values has increased the equity in their property. According to Realtor.com, the national inventory is currently 29% higher than this time last year in 2021. Homes are also staying on the market a few days longer than in previous months. This is a huge step forward, although experts are still expecting bidding wars for the next few months.
During this time, many potential homebuyers can still find the home of their dreams through the flexibility of renovation loans or searching for homes that have been on the market for an extended period of time.
Much like interest rates, inflation remains consistent. Greg McBride, the Chief Financial Analyst for Bankrate, predicts that rates may soothe if consumer prices were to wind down.
Nationally, borrowers are concerned with purchasing due to the higher interest rates. The higher interest rates coupled with inflation are causing some to wonder if now is a good time to buy. Homebuilders are fielding the same concerns and have begun to increase incentives to make up for falling demands, such as tax breaks on interest and cash incentives for green energy. This current trend should continue as the Federal Reserve continues to tighten monetary policy to combat inflation. The Fed meet again on July 27 and 28 and experts are expecting another rate hike to be announced on 28.
If you’re thinking about purchasing and are concerned about interest rates, consider some of our specialty programs, the Closing Guarantee and Lock and Shop. With Lock and Shop, your interest rate will be locked during your house hunt. This will provide an opportunity to save money should interest rates continue to rise. The Closing Guarantee program provides cash incentives for sellers and provides both buyers and sellers confidence that financing is ready with a fully approved buyer.
While we can’t predict the future, we can support you through the market changes. Be sure to communicate openly with your Loan Originator about any affordability concerns. Your Real Estate Agent will also be able to assist with negotiations and navigating the local market. When you’re ready for your homeownership journey, contact us.
Sources: Bankrate, Realtor.com, The Washington Post, U.S. Department of Energy
McGlone Mortgage Group offers exceptional customer service and a convenient mortgage process. Whatever your financing needs, our goal is to exceed your expectations.