Today’s real estate market is difficult to break into. Not only is the real estate inventory extremely limited, making it more difficult for buyers to find suitable homes, but house prices are very inflated, which means that many buyers cannot afford to go there. ‘before with the purchase of a house.
It is therefore not surprising that the volume of mortgage applications plunged in July. Last month, mortgage applications for the purchase of new homes fell 27.4% from a year earlier, according to the Mortgage Bankers Association.
If you’re struggling to buy a home, you might be wondering if it’s worth putting your home search on a hiatus. Obviously, this is a route other buyers are taking. And the reality is that there are pros and cons to waiting to buy.
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The advantage of waiting
Right now the houses are extremely expensive. The average loan amount last month rose to a new record high to $ 402,440. And a big reason is that sellers get away with charging more for their homes because there isn’t a lot of competition.
If you choose to delay your home search, you can give the housing market enough time to open up. Over the next few months, we could see more sellers listing their homes, and once stocks are replenished, home prices should start to drop. So waiting to buy a home could be to your advantage, financially speaking.
Plus, if you wait until more inventory is available, there’s a better chance you’ll manage to find a house that actually ticks all the right boxes. If you buy when inventory is low, you might be forced to settle for a home that isn’t perfect for you, or a home that comes with a long list of needed repairs that eat away at your savings.
The downside of waiting
While putting your home search on hold may benefit you, there are some drawbacks to be aware of. On the one hand, we know what mortgage rates look like right now. We don’t know what they will look like in six months. And while there’s a good chance they’ll stay low until 2022 and maybe even beyond, it’s hard to say what rate you might get if you choose to buy a home, say, in. January compared to now.
Also, while we would like to hope that more inventory will hit the housing market later this year, we don’t know if that will happen. And if stocks hold, home prices might not come down much, if at all.
Ultimately, there is no right or wrong answer here. If you decide to continue your home search, you might end up finding that rare home that fits your budget and ticking the right boxes on your wishlist. Or you might continue to struggle to find a suitable place to buy. If you keep looking for a home, remember that there’s a reason mortgage application volumes declined over the past month – and don’t be surprised if your search doesn’t turn out to be very productive.