Buying and moving into a new home is one of life’s great experiences, especially if you’re buying your first home. From getting that pre-approval to the “yes!” response on an offer to closing and moving in, every step is exciting. And while the process is engaging and fun, it’s important to prepare for moving day […]
Pre-approval may be a buyer’s most important tool in an unpredictable market
In most of the U.S., the current housing market remains hot. The most recent data show the time on market for homes sold in the US was 31 days (though this will vary by local market).
While slower than much of the post-pandemic housing boom, 31 days is still an incredibly short time to sale. In addition, the median home price increased 2.9% year-over-year despite increasing mortgage rate.
Mortgage interest rates are rising, but the market remains hot
Interestingly, the market remains hot despite mortgage interest rates having increased dramatically in recent months.
Interest rates rising steeply for more than two years to higher than 7% would in most cases lead to a significant cooling of the housing market.
But that’s not the case today. To be sure, fixed mortgage rates above 7% are high compared to rates in recent years when rates on those benchmark mortgages dipped to approximately 2.4% in early 2021.
Taking the long view though, today’s rates are high compared to recent years, but nowhere near the rates of 1980 and 1981, which all but completely shut down the U.S. housing market. Even in the face of rising interest rates, buyers don’t seem deterred by the currently highest interest rates of recent years.
The homebuyer’s quandary
In the face of these conflicting numbers, buyers are caught in a quandary. “Will interest rates go higher? If so, will the market cool off? Should I buy now, even though prices and interest rates are high? Should I wait?” These questions are legitimate and no one has definitive answers.
Compounding the problem is the highly competitive nature of the housing market with multiple buyers making offers above asking prices and escalation clauses becoming an almost regular feature of offers.
The bottom line is that serious buyers must be vigilant in seeking homes that are reasonably priced and they must be prepared to move quickly and decisively to make competitive offers.
This means getting pre-approval (as opposed to pre-qualified) for a mortgage is an absolute necessity. Sellers in the current market are generally choosing from multiple offers and those coming from prospective buyers who are not pre-approved for a mortgage may be dismissed.
Be proactive and get the assistance of a mortgage professional
Facing these realities, buyers should seek the assistance of experienced, knowledgeable loan officers. Our loan officers have a wealth of experience and expertise gained from helping hundreds of homebuyers in a wide variety of circumstances position themselves to successfully pursue the home of their dreams.
Our loan officers help buyers secure pre-approvals, make decisions on a full spectrum of loan products and choose the right mortgage for their exact situation. Make no mistake; your loan officer is the most important ally you have in purchasing a home.
Get the service you need; contact a SmartMortgage loan officer about pre-approval today
The loan officers at SmartMortgage have experience in supporting countless buyers seeking conventional and innovative financing for homes. Regardless of your situation, our loan officers will support you from application to closing and are ready to help you. Contact us today and get the professional advice and service you need.