(WTNH) – The housing market has been on a tear for the last two years, but now with interest rates skyrocketing, sales are slowing down.
This could actually be good news for buyers. Thursday morning as interest rates rise, the frenzied housing market is starting to slow down.
“I heard a good analogy we’re not in a shift, we are in a sharp new turn where the car is on two wheels,” said Arizona real estate agent Megan Williams.
In Arizona, Williams said market uncertainty and rising mortgage rates might be making it easier for average home buyers to get in.
“What we’re seeing is lots of price reductions on listings, lots of listings coming on the market,” she said.
Sales for existing homes were falling in May, down more than 8% from a year ago, and the inventory of homes on the market is up over 12%.
The reason is that 30-year fixed mortgage rates are now up to about 6%, compared to about 3% a few months ago. For a $300,000 house, that would be an extra $430 per month.
But, it’s a cost a buyer like Claire Kimiri is willing to surrender.
“Certain neighborhoods that were kind of out of my realm of thinking or possibility are now part of the discussion,” she noted.
But, experts warn the timing can be tricky.
“If you need to buy a home within the next year or so you’re better off acting sooner and locking your rate sooner,” said Danielle Hale, a chief economist at realtor.com.
So to buy fast, experts say to talk to a lender to get a pre-approved loan and have all of the documents needed ready to go, such as pay stubs, taxes, returns, and investment statements. Also, play to the seller’s needs.
“They might need a little bit more flexibility. Maybe if you can give them a longer closing timeline, that might help them find a home that they’re going to go to. Or if they’ve already found that home, you might want to try to close quickly so they can get this deal done,” said Hale.
Finally, keep an eye on inventory and be patient. Remember, for buyers, it’s important to keep in mind that the price of a home is just one aspect of an offer.
Being flexible with some terms can go a long way toward making an offer.