I’m hearing of so many buyers who are thinking about pausing their home search this summer. It’s understandable. It’s been a very frustrating year for buyers. With the looming threat of interest rates increasing over the coming months and years, and the recent rise in inventory it would be best to keep looking and try to buy this summer.
Although the market is still hot, it has softened slightly. We are seeing about half the number of showings/home as we were seeing during the peak frenzy this spring. That is a consistent trend across the metro area. This means fewer offers in multiple offer situations. This is due to a combination of things… increase in number of homes for sale (inventory), buyers quitting their home search or maybe putting it on pause while they travel or focus on other priorities this summer. There is always a seasonal slow down this time of year as we have fewer buyers and more homes in the market.
We are now hearing the Fed talk about raising rates over the next 2-3 years. Those are planned increases to get our rates back to “normal.” What we can’t predict are those market reactions that cause spikes in interest rates like we saw last summer when rates almost hit 5% with no warning. Rates have been low for about 9 years for many reasons but we know they won’t stay this low much longer. If the interest rate goes up even 1/4 of a point, it can lessen your purchase power and the price of home you can afford. It can really impact how much home you can buy.
So, the summer of 2021 is a frustrating and volatile time to buy a home… but it could also be your opportunity to get in on the 3% interest rate (or less) while you can. And you’ll have more homes to see due to having more homes available for sale during the summer months.
Hang in there buyers… low rates and more inventory selection are still good reasons to stay the course this summer.
Don’t give up.
(Graph: Megan Aller)