Thinking about buying a home or selling your current one? Stop thinking and start doing. Now is the prime time for both sellers and buyers. Here's why.
Mortgage rates are rising. After a sharp decline, mortgage rates are starting to inch back up, with a 30-year fixed mortgage averaging just over 4 percent now, according to Bankrate.com. And analysts expect that trend to continue. That means more buyers are trying to qualify -- good news if you're selling. And, if you're buying, it's one more reason to apply now yourself.
Inventory is decreasing. The number of foreclosed homes, which flooded the market and drove down prices, is ebbing. Meanwhile, there are fewer owner-occupied homes on the market. "Inventory is low," says Tara Waggoner, a real estate agent with Redfin in Houston, Texas. That means there should be more demand for your home if you're selling. And if you're buying? Well, better to look before inventory falls further.
Home prices are increasing. Home prices are up 11 to 12 percent from a year ago, according to CoreLogic and the S&P/Case Shiller Index. And that's likely to continue. "There's been a steady increase from the beginning of the year in home prices," says Waggoner. Sure, you might not get as much for your home as you would a year from now. But you're likely to get a good price, given how much market values have risen in the last year. And if you're looking? Better to buy before prices get higher. (The upward trend should also help you feel more assured that your new home will retain, even gain, value.)
Competition is more intense. Redfin’s Bidding War Report showed that for April, 73 percent of purchase offers faced competition from other buyers. In California, agents reported receiving between eight and 15 other offers for the same property. Good news if you're selling, of course, as bidding wars mean higher price offers. If you're buying, Waggoner recommends being one of the first people to see a home once it’s been listed and making an offer quickly. Getting pre-approved (not just pre-qualified) by a lender can also help save you time and give you a more realistic sense of what you can and can't afford so you can be confident when you make an offer.
'Tis the season. April, May and June are traditionally the top months to sell, according to research by Redfin. That’s likely in part because most school years end in late spring. (Who wants to move their family mid-school year?) Weather can also be a factor: Most people don’t want to trudge, or drive, through the cold and snow from one home tour to another. (December tends to be the worst time because of the weather and the fact that there are fewer buyers around the holidays.) Bonus tip: If you're selling, Realtors say the best day to list it is Friday. "When you’re looking for a house, the first thing you’re going to do is get online and look for those homes so you can schedule your weekend," says Waggoner.
And if you're buying? You might be able to get a better price in the winter, but you won’t have as much selection. The top months to sell mean more homes to choose from. Just don't spend too much time browsing. If you’re looking for a bargain, this might be the last chance to get one. "People realize that if they’re going to buy a house they might as well do it now because prices are still lower than they were five years ago and they can’t stay down forever," says Linda Mildon, real estate agent with RE/MAX in Florence, Ky.
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