How the housing market could be shifting to favor buyers in 2022
Could a more balanced housing market be around the corner? Here’s what that means for homebuyers and sellers.
Just the FAQs, USA TODAY
There’s a reason so many home buyers have been frustrated with the housing market lately. Home prices are through the roof, and there’s no indication they’re about to come down.
In March, home prices rose 20.6% on a national level, according to the S&P CoreLogic Case-Shiller Home Price Index. That’s the most recent month of data the index has made available. And it also accounts for rising mortgage rates, which were already up substantially in March compared to where they sat at the start of 2022.
All told, if you attempt to purchase a home today, there’s a good chance you’ll end up overpaying for one. In fact, these days, it’s really, really hard to find a bargain when it comes to a home purchase. This isn’t to say it absolutely can’t be done – but the stars really need to align for that to happen.
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Why you’re unlikely to find a bargain today
Today’s housing market sorely lacks inventory. This doesn’t just apply in select cities. Rather, it’s a problem that exists across the country.
Because there aren’t enough homes to meet buyer demand, sellers really get a lot of leeway when it comes to charging more for their homes. Plus, when homes hit the market, they tend to have multiple offers on them, which commonly drives their price up. And until inventory increases in a meaningful way, it’s going to be very difficult to snag a good deal on a home.
Compounding the problem is that it’s getting more expensive to take out a mortgage. So if you buy a home today, not only might you pay more for that property, but you might also spend more to borrow.
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How to eke out a deal
While homes today are generally overpriced, that isn’t to say you can’t find a single bargain. But you may need to team up with an excellent real estate agent to help you find one.
Keep in mind, though, that if you come across a home that seems underpriced, there may be a reason for it. Chances are, the home in question has some sort of issue that’s expensive to fix, so no matter what you do, don’t attempt to buy a home today without completing a home inspection. Some buyers are waiving those inspections to get their offers accepted, but that could end up being a costly decision.
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Meanwhile, you might manage to snag a great deal if you encounter a desperate seller who needs to move ASAP, and you’re able to make a cash offer on a home. It may be that a given seller has to relocate for a job, for example, and needs to close on their sale within a few weeks. If you happen to have enough money to make a cash offer, you might manage to snag that home at a relative discount.
But for the most part, don’t go into your home search expecting to find any bargains. You’ll be lucky if you only manage to moderately overpay for a home given the prices sellers have been commanding lately.
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