The real estate market today is quite different from what it was just a few
months ago. Mortgage rates have risen dramatically which impacts the
borrowing power of home buyers. The frantic pace of the past few years
has also slowed with homes staying on the market longer than we saw
during the last few years.
With all these changes, many potential homebuyers are wondering when
the prices will crash. In other words, when is the right time to buy?
The housing market is affected by supply and demand. With a potentially
smaller buyer pool, the assumption would be that home prices would fall to
attract the few buyers still looking. But prices are not reacting this way in
many markets. In fact, the supply of homes nationwide has stayed
relatively small, which in turn has helped prices stay steady.
The fact is that rising interest rates are affecting sellers as well. Most sellers
are planning to purchase a replacement property. This means that many
sellers are reconsidering their own ability to purchase the desired
replacement home. As a result, rather than attempting to capitalize on any
lingering seller’s market, many have withdrawn instead, keeping the current
inventory low and prices stable.
While it’s difficult to predict the effect of more interest rate hikes on seller’s
behavior, homebuyers should concentrate on finding the right property for
their needs rather than second-guessing the market. It’s always the right
time to buy the perfect property.