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Why now might be a good time to buy a home

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Editor’s Note: Every Friday, WRAL TechWire takes a deep dive into the Triangle real estate market. This week: Why now is the perfect time to buy a home in the Triangle, especially for first-time home buyers.

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Raleigh – First-time homebuyers, discouraged by rising prices and fierce competition, are returning to the housing market, and even with mortgage rates hovering near 7%, it may be a good time to buy a home in the Triangle. Maybe. The market has changed. For example:

“Overall prices were lower in our price range despite higher interest rates,” said Durham’s Savannah Hopps. and signed the contract by noon the next day.”

Courtney Brown, Licensed Real Estate Agent for Hunter Row, added: Sellers now have more work to do. ”

In addition, there is a ‘buy-out’ option from the lender to help reduce costs.

It’s also a good time to see what incentives the builder offers.

up to date data According to national real estate broker Zillow, the percentage of first-home buyers will recover in 2022 after declining in 2021.

“High mortgage rates disproportionately encourage current homeowners to keep their homes,” said Manny Garcia, a demographic scientist at Zillow. It seems to be profitable,” he said. “The slowing flow of homes into the market suggests that homeowners are likely comparing current low mortgage rates to today’s rates and deciding not to move. I have.”

Many Triangle homeowners who have purchased or refinanced in the last decade have pegged interest rates below 4%, with others at 2.75% or lower. But now the average interest rate for a 30-year fixed-rate mortgage is 6.94% for him. latest data From Freddie Mac.

So some current owners feeling of fearGarcia pointed out that he had decided not to move for now.

Rising mortgage rates scare buyers.Triangle prices are falling

Rents are still rising, but home price gains are slowing

However rent is still rising Located in the triangle, currently outpacing house price increases.

In fact, according to the latest data, Raleigh rents rose twice as fast nationwide from September 2021 to September 2022, rising faster than house prices rose during that period.

The Triangle property market softened a bit following a hot spring and summer market, but some agents said this was more of a return to seasonal trends than a housing slowdown or downturn. told WRAL TechWire. residential accident.

Instead, home prices in Triangle increased 13.9% between September 2021 and September 2022, according to the latest data from the Triangle Multiple Listing Service (TMLS). This is much smaller than his April 2021 to April 2022 price increase of 25.8% for the region.

Housing Pain: Raleigh Rents Soar with Double Inflation – 7th Highest in US

Good news for first-time home buyers

This could be good news for first-time homebuyers in the Triangle.

Earlier this year, homes sold in mere days regardless of their condition, but realtor Brown said sellers shouldn’t expect that in today’s property market. rice field.

Instead of facing a bidding war, buyers may have more time to research the market, write offers that best suit their needs, and win deals, Brown said. rice field.

“If you have a good offer, you can probably get a house at list price right now,” Brown said. “There are more options now, so it might actually be a good time to buy a home.”

But earlier this year, Nearly impossible for first-time homebuyers Find affordable homes that fit their needs while facing competition from other buyers and investors buying homes in the Triangle.

Realtors say it’s nearly impossible for first-time buyers to find a home in central North Carolina

success story

Earlier this year, Savannah and Austin Hopps rented a 780-square-foot apartment. But with two dogs and a desire to be close to the business they had set up in South Durham, they were ready to buy their first home in the Triangle.

“I knew the rent would likely go up, but I had already paid over $2,000,” he said. NEIGHBORHOODE barre, located in South Durham. “I wanted to buy before the lease ended, so I wanted to be closer to my business.”

Interest rates in August and September were higher than when I first looked for homes in the area, but the market is much less competitive than the previous year and this spring and summer. I noticed

“Despite rising interest rates, prices across the board were lower in our price range,” Hopps said. I signed the contract by noon.”

Hopps did not communicate the terms of the mortgage to WRAL TechWire. However, she noted that even after their offer was accepted and they fixed the mortgage rate, interest rates rose again.

Hopps said, “We knew South Durham was where we wanted and refinancing was an option later on, so we definitely had the phrase, ‘Date, marry home.’ “Now our mortgage is the same as rent, but we live in a house we own. It’s bigger than an apartment, has a huge yard for our dog, and is close to work.” It’s in.”

Thinking of buying a home?Rising mortgage rates mean much higher payments

MORE LENTING OPTIONS

and meanwhile Mortgage interest rate above 7% May scare away some buyers Considering home ownership, many lenders and many home builders offer programs and incentives to make it easier for buyers to purchase a home.

“We expect rates to stay at current levels, stay at current levels, or be slightly higher than current levels,” said John DeHart, branch manager at Movement Mortgage in Durham. said.

But even with mortgage rates approaching 7%, homebuyers still have options, DeHart said.

“One of the most popular marketing items right now is what’s called a two-to-one buydown,” he said. “This gives buyers an opportunity to ease their mortgage payments.”

Here’s how it works: For his first year after purchasing a home, the mortgage interest rate is structured so that the buyer is 2% lower than the market rate to which he is entitled. In the second year, the interest rate will be 1% below the market rate, and from the third year onwards, the loan will transition to the market rate at the time the mortgage was signed.

This can have a big impact on the buyer as well.

For example, a $300,000 loan with a 7% mortgage rate typically means the borrower will pay about $2,000 per month. But a 5% interest rate means a monthly payment of about $1,600, saving about $400 a month for his first year of owning the house.

“When it comes to building wealth, 7% interest payments are better than 100% rent payments,” says DeHart. “Because you’re still making small monthly payments on the principal. The house will appreciate over time.”

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I would like to purchase a builder

Bill Smith, president of the Johnston County Association of Building Contractors and Jim Allen Group licensed real estate agent, said:

“We are also consistently changing our incentives,” says Smith. “He comes twice a month, especially at the end of the month.”

In addition to providing closing costs, sometimes in exchange for working with preferred lenders or preferred closing attorneys, builders may offer design package upgrades or closing fees to help buyers lower mortgage rates. You may have to pay a fee.

Builders want homebuyers to have a great experience buying and owning a home. the builder is about to make a deal With homebuyers now.

“Builders are much more open to selling homes,” DeHart said, adding that some builders are touting a two-to-one buy-down when putting homes up for sale.

And October may be the best time to buy a home nationwide, according to a recent analysis from ATTOM Data Solutions. According to his ATTOM dataset, which was shared with WRAL TechWire upon request, in Triangle historically the best months to buy were fall or winter.

The Triangle of Top Areas for New Homes in the U.S. – When to Buy?

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WRAL TechWire Reporter Jason ParkerThe author of this report is a licensed North Carolina real estate agent.These special reports use the category tag “triangle real estate” Also “triangle real estate market

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