The main purpose of these rate hikes, according to the recent Bankrate.com article “What the Fed’s May rate hike means for homebuyers and sellers,” is to calm inflation. The Bankrate.com article goes on to point out that the housing market tends to be resilient in general. This is because mortgage rates often have no bearing on the life events that lead to a move.

I found this information given in the article very telling of this point. The article notes, “History bears this out. In the 1980s, mortgage rates soared as high as 18 percent, yet Americans still bought homes. In the 1990s, rates of 8 percent to 9 percent were common, and Americans continued snapping up homes. During the housing bubble of 2004 to 2007, mortgage rates were higher than they are today — and prices soared.” (Ostrowski and Petry)

Mary Marengi of Academy Mortgage also shared her thoughts on this topic in a recent post titled, “Homebuyers want to know: Why a 3rd Fed hike?” In this post, she also points to the fact that a Fed rate hike has no direct bearing on mortgage rates. Rather, she notes how it could be a good thing, saying, “…the Federal Reserve’s efforts to calm inflation may be welcome news to you. Mortgage rates typically rise in times of inflation. If inflation cools, mortgage rates are likely to follow suit.” (Marengi)

So, if you are thinking of buying, know there’s a light at the end of the tunnel. If you do buy now while rates are high, you will always have the opportunity to refinance when rates come down. In Marengi’s post, she also notes these key points regarding buying a home:

• Homeownership is historically considered a reliable hedge against inflation.
• Home price growth is moderating.
• Homeownership can still help you build prosperity. (Marengi)

In the end, do your homework. Read these articles, talk with a lender and even a local realtor to get a sense of the market in the area you plan to buy. After doing the due diligence, only then can you make the best decision for your next move.

Sources: 

Marengi, Mary. “Homebuyers want to know: Why a 3rd Fed hike?” Academy Mortgage Corporation. 3 May 2323, https://academymortgage.com/learning-center/fed-rate-hike?lo=Mary-Marengi. Accessed 9 May 2023. 

Ostrowski , Jeff, (Edited by:Michele Petry). “What the Fed’S May Rate Hike Means for Homebuyers and Sellers.” Bankrate.Com, 3 May 2323, www.bankrate.com/real-estate/how-fed-rate-hike-affects-housing/. Accessed 9 May 2023. 

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It appears we’ll see very little change in the real estate forecast for buyers and sellers. This is according to a recent poll conducted by Trulia and featured in U.S. News & World Report on December 13, 2017. According to the article, buyers need to remain diligent and sellers can be very optimistic.

The main reason again this year…inventory is expected to stay low. If you are thinking of buying or selling, make a “to do” list and start working on it now. This will put you in great shape ahead of the spring market (hint, hint…it will start earlier than you think!).

Here’s a list to help get you started:

1. Interview realtors: Sign on with someone who’s attentive and available. This will matter when you are dealing with multiple offers.
2. Get your financing in order: Meet with a financial professional to understand your options.
3. Start to declutter your home or apartment: This will help make packing easier, whether you’re buying or selling. Check the tips in the Infographic below from Houselogic.com. They will make getting started less painful.
4. Plan your next move: Research areas, neighborhoods, home values, etc. (Hint: a real estate professional can help with this and provide a CMA – comparative market analysis – for your property!)
5. Don’t rule out getting started early: Work with your realtor and follow the market in your area. Listing your home or buying a home early might put you ahead of the competition.

Image: HouseLogic

The post 2018 Real Estate Goal: Start Planning appeared first on Laffely Real Estate Associates.