In some ways, this is the market my buyers have been waiting for; lower demand, fewer bidding wars, prices leveling out, and inventory building. On the other hand, questions about a looming recession and rising interest rates have buyers wondering if this is the right time to make a move. Here are four things that you may not have considered:
A Mortgage Could Bring Stability
If you are a first-time homebuyer or sold and are now renting to wait out the market, you can create a hedge against inflation by stabilizing one of your highest costs. The inflation rate is still increasing, and rents will continue to increase along with it. Buying a home now vs. waiting can lock in your housing cost to protect against higher rents or the unpredictability of the landlord selling.
‘Date the Rate and Marry the House’
This new industry buzz phrase means you can capitalize on lower prices and better selection and refinance later at a lower interest rate. I get it; it’s hard to see mortgages in the ‘6’ range after years of lower rates. However, you now have some breathing room to find the house and location you want.
Negotiation Power is Making a Comeback
In the past few years, purchasing a home has not only been difficult but risky, as buyers have had to shed virtually all of their diligence to be successful bidders. If that risk were not your cup of tea, this environment would be much less perilous. It’s still a seller’s market, but Buyers have gained leverage and, in most cases, can negotiate on items favorable to the buyer, such as home sale and financing contingencies, repairs, and flexible closing dates.
It May Be Harder to Get a Mortgage During a Recession
While home prices may be lower during a recession, obtaining financing may be more challenging.
Lenders are typically more cautious about approving loans during an economic downturn, so you may need a higher credit score and down payment to qualify for a mortgage. If you’re considering buying a house during a recession, you must talk to a lender beforehand.