Buying in Today's Market

Buying in Today's Market

Last year was surprisingly good for sellers but challenging for buyers. Demand for homes outstripped supply, prices rose, and many buyers found themselves bidding against other buyers.

Market Conditions Now

What’s the market like now? On the plus side for buyers, mortgage rates are lower than this time last year. The average 30-year fixed rate is 2.73%, compared with 3.47% one year ago, according to the Federal Reserve Bank of St. Louis. The downside for buyers continues to be low housing inventory. Montgomery County had 2,423 active listings this January, compared with 5,492 last January. New listings in the county this January totaled 1,068, compared with 1,256 last year.

Many buyers who didn’t find a home last year are likely to jump back into the market, adding to Spring demand. We’re already seeing homes sell quickly. In Montgomery County, the average days on the market this January was 37, compared with 65 last January.

Advice for Buyers

Get Pre-approved—If you plan to buy this Spring, start by getting pre-approved for your mortgage. You’ll need to provide a mortgage pre-approval letter along with your offer, and with homes selling quickly, you should have it ready to go in advance.

Be Realistic About Prices—If prices in your preferred location are higher than you expected, you may need to revise your expectations or explore other areas where housing is less expensive and you can buy a larger, more updated home.

If You Have a Home to Sell—If you need to sell your home first, look into temporary living arrangements so you’ll have a place to go once you sell your home and before you can move into a new one. Buyers without a home to sell or who can purchase without selling their current home are in the best position to get their dream home. Sellers will usually consider a home-sale contingency only if they can’t find a buyer without one—an unlikely scenario in today’s market.

Although early indicators favor sellers, the year may still offer surprises if homeowners who have been hesitant to sell finally put their homes on the market, increasing inventory and in turn making life easier for buyers.

Housing market statistics from BrightMLS, and interest rate data from the Saint Louis FED, both as of 2/11/21.

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If you’re planning to buy or sell a home, contact Annette Nelson at (610) 247-7892 or annette@preferredhomes.com

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