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When buying a home in today’s market, you have to know what market trends will most likely affect your search. Realtor.com’s Chief Economist, Danielle Hale, says buyers should focus on two factors:
“Going forward, the conditions buyers face are primarily dependent on two things: mortgage rates and housing supply.“
Let’s take a look at each.
Mortgage Rates Projected To Rise in 2022
Your interest rate directly impacts your monthly mortgage payment when you buy a home. Experts predict rates will continue rising through 2022 (see graph below):
Next year, mortgage rates are expected to rise, as shown in the graph. Despite this, they’re still extremely low by comparison to where they were a few years ago. So, today’s Denver homebuyers are motivated to lock in a low mortgage rate before rates go up.
More Homes Are Expected To Be Available This Season
In addition, buyers must pay attention to the number of homes currently for sale. According to the National Association of Realtors’ (NAR) latest Existing Home Sales Report, the current supply of inventory stands at just 2.4 months. To put that into perspective, 6 months of supply equals a balanced market, which means there are enough properties for everyone.
Denver homebuyers looking for more options may still have some good news to look forward to. According to a new survey conducted by realtor.com, more sellers plan to list their homes this winter, which means there will likely be more choices.
What Does That Mean for You?
Despite some improvements in your options this season, it will not significantly change market conditions overnight. For the market to become neutral, NAR says there needs to be many more listings available:
“Given the average monthly demand . . . , 3.55 million homes should be on the market to meet a level of inventory equal to six months of demand, implying a shortage of homes for sale of 2.24 million.”
Therefore, even though more homes will be coming to market this season, buyer competition will remain fierce as there won’t be enough properties for sale to satisfy the current demand. When you are ready to make an offer, you must move quickly.
More options are welcome news for anyone thinking of buying a Denver home this winter, but that does not mean you should slow down. Get in touch with me so I can help you act as quickly as possible when the right home for you hits the market.