What to Expect for the Fall Real Estate Market
Though we’re still feeling the summer heat outside, Fall is on its way. Typically, a literal and figurative cooling-off period for the housing market, this year has been full of surprises. To put it mildly, 2022 has certainly been anything but ordinary.
Truly no one can be exactly sure what such a year like this one may hold in store for us, and we don’t have a crystal ball. However, we can forecast how we think things will turn out based on our experiences and by watching industry trends.
With that in mind, here are a things that potential homebuyers may have on their minds as we move into the autumn months. We’ll take a look at where we’ve been, where we are and, perhaps most importantly, where things are may be going.
Where are Mortgage Rates going?
It’s important to understand that, while they are definitely linked, the interest rate set by the Federal Reserve (FED) and mortgage rate aren’t a 1-for-1 increase, and are subject to any number of different factors, such as the type of loan you want to pursue, the bond market and your personal credit score, just to name a few. Having said that, when you see the FED raise rates, it’s a safe bet that some increase in mortgage rates may soon follow.
This year has seen mortgage rates increase, that’s true, but it’s not always been a straight upward climb. Much like a rollercoaster, rates may have already hit something of a plateau for the year, but don’t expect the exhilarating plunge back down to 2021 rates anytime soon.
At the time of this writing, a 30-year fixed mortgage is just under 6%. Market volatility due to inflation and uncertainty may push that back up to around 6% or higher, so you might see the roller coaster creep back up the curve to find another peak down the line. With so many unknowns, it’s impossible to say for sure what it will do, so strap in and get ready for the ride.
Things you can manage and control
The best defense against rising mortgage rates is to concentrate on those things that affect your rate that are within your power to affect. A short list includes, but is not limited to your:
- Credit score
- Personal savings
- Down payment amount
- Debt-to-income ratio
- Loan type/term
Bottom line: It can feel like you’re powerless on the seas of a storm-tossed market, but you have more control over the situation than you might think. Talk to one of our mortgage professionals. They can help you navigate through the torrent of the current market.
Where we’re going
While inventory is increasing it is still low by historical standards.
Ultimately, the market going forward is seeing an increase in buyer options without much need for waitlists or bidding wars but expect it to remain competitive for the foreseeable future for the most desirable properties.
Bottom line: Even with rising interest rates, the demand for homes is still widespread. That’s not likely to change any time soon. However Buyers are able to get better prices than 5 months ago and Sellers are being more flexible with repairs and interest rate buy-downs.
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