Americans facing hot housing market as all-cash offers become more popular
EVANSVILLE, Ind. (WFIE) - As Americans face an increasingly hot housing market, many are trying to figure out if they should buy now or wait it out.
Local ERA agents tell us the housing market is actually pretty decent right now.
With interest rates at 4.5%, they say that rate won’t affect your payment to a degree where you wouldn’t be able to buy a home.
However, there are some downfalls with a hot market.
The first is multiple offers down on a house that has maybe been available for 24 hours.
All-cash offers are becoming increasingly more popular, making it a little more difficult for first-time homebuyers.
There are even companies, like Homeward, a real estate agency, that help home buyers buy in cash for a price.
Data shows in the third quarter of 2020, just more than one in five homes were all-cash sales.
Now a year later, it’s more like one in three.
Some of our local realtors say despite some of the difficulties, there is some good news out there.
“The lower inventory has definitely presented a challenge because we’re seeing more multiple offer situations, but the good news is the spring and the summer market brings more homes to the market,” said Annabelle Ismail, an ERA realtor. “So it’s really just about consulting with your realtor on how to make your offer the strongest that it can be with the financing that you have available to you or your savings.”
Some of our local realtors say don’t get totally discouraged, it’s not always about having the highest net to the seller.
They say there are other terms that depend on the seller’s situation that are big factors.
Agents also say there are a lot of misconceptions that the interest rates are high right now.
They say, historically, compared to the last 10 or 12 years, they’re very low right now.
So now seems like a good time to consider buying, especially since experts are predicting those rates to only increase as the year continues.
“We don’t know how high the interest rates are going to get,” Ismail said. “We do not have a crystal ball. But the analysts are saying they’re going to continue to rise and so that’s what we kind of bank on. They’re around 4.5% but it depends on your credit scores a lot of times and your loan program. So those are the kinds of things to talk to your lender about.”
Our local agents say when those rates increase, it could help balance things out.
With increasing rates, it helps slow the demand so the supply can catch up.
For sellers worried about putting their home on the market, agents say there’s been strong growth in value over the last couple of years
Homes that would have sold at $250,000 a few years ago, might be selling for $300,000 or more in today’s market.
Another difficulty people are experiencing is the rise in rent, Forcing even more people to think about buying.
”So with the cost of rent increasing substantially, that makes home-buying more attractive and a better long-term investment,” Ismail says. “There’s a lot of financing options out there that are 100% programs where the government will actually grant the buyer a down payment. So if they have a little bit of savings for a down payment they can actually utilize that for their closing costs, and use this grant program if they qualify that we’ve seen pays seven to eight thousand dollars, and it gets them into a home.”
Overall, our local agents say don’t get discouraged if you don’t get your first choice or even second choice when searching for a home.
They say there will be plenty of options popping up as the year continues.
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