Home News I wanted to buy a beach home. Did I miss the right time?

I wanted to buy a beach home. Did I miss the right time?

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Q. I was planning to buy a vacation home this summer, but now I need a mortgage. I waited because the price is so high, but interest rates are rising now. Should interest rates rise and wait for home prices to fall? I don’t know how to decide. No villa needed. I just want it.

— Buyer, maybe

A. It’s a big goal.

You are in a good position when it comes to villas “I want” not “need”.

Gerald Pappetti, a certified financial planner and CPA at Fairfield U.S. Financial Services, said real estate values ​​have risen significantly since the onset of the COVID pandemic.

But there are recent signs that the residential property market is starting to cool, he said.

Real estate broker Redfin reported in August that it closed nearly 63,000 home-buying deals in July, Pappetti said. This is his highest percentage in over two years and the third highest percentage since 2017.

Rising mortgage rates and home prices point to a sharp slowdown in the housing market. Not affordable.

An analysis by the National Association of Realtors (NAR) showed home sales fell 5.9% in July, down 20.2% year-on-year, the sixth straight month of decline, he noted, and Redfin reported that this current In the environment, buyers are much more likely to ask for price cuts and repair requests, as well as contingent contracts that allow them to cancel the contract without penalty. If sellers refuse to meet those demands, buyers are increasingly dropping deals to look for other options, he said.

Last week, Standard & Poor’s released the Case-Shiller National Home Price Index, which tracks price growth in June, and showed signs of a cooling in the housing market, as national home prices rose 18.0% annually through June. Revealed. In May, Puppete said.

Also last week, mortgage originator Freddie Mac released its National Home Price Index covering June. will increase Only 0.1%. The index, which tracks prices for single-family homes, rose 1.4% in May, his fourth straight month of slowing from his record 1.9% gain in February, he said.

“The cooling in the U.S. housing market, evidenced by recent declines in home sales and housing starts, has yet to translate into a significant slowdown in price gains,” Pappetti said. “Despite the impact of rising mortgage rates and falling affordability, home prices continue to soar to record levels throughout 2022.”

Another factor in considering buying a home now is whether the US is in or is about to enter a recession. Because it can directly affect the price of the house.

I will address your question now.

The New Jersey housing market, in particular, has cooled but remains strong, largely because demand is outstripping supply, said Puppetty, who said in a recent conversation with real estate associates that over the past month I pointed out that it shows more housing being listed. affect the price. He also noted the lack of bidding wars on homes for sale.

“Unless you find the ideal vacation home that you fall in love with completely, based on the prospect of an economic slowdown with a possible recession, I would. Please wait to purchase at this point. “ He said. “Furthermore, some economists believe that with the economy slowing and a possible recession, mortgage rates should fall in a year’s time, and waiting may benefit. I feel it.”

Email a question [email protected].

Karin Price Mueller wrote: deception It is a column of NJ Advance Media, NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJ money help. seek NJMoneyHelp on Facebook. Apply NJMoneyHelp.comof Weekly electronic newsletter.

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