We are all busy buying gifts in December, but traditionally we slow down when it comes to buying homes during this time of year. Based on the level of purchase activity last December, still historically low interest rates, and incredibly tight inventory, we expect this month to have more real estate movement compared to normal Decembers. Yet, we still believe that the next three to five weeks is an ideal time to buy a home.
Top three reasons why you should be on the house hunt now:
- Homebuyers become very active in early January. We see pre-approvals flood our desks in the week after the new year. By the end of January, we typically have a backup of pre-approved qualified buyers. We have conducted detailed research that showed January as the most concentrated time for ‘first time home’ keyword searches and April for ‘qualify for mortgage’ searches. In other words, people really intensify their home search after the holidays which leads to a very competitive spring buying season. Perhaps New Year’s resolutions motivate the eager homebuyer to make that smart, secure investment in a home, and they don’t waste a minute when the clock hits midnight. There will be less competition when making an offer on a home this month vs. next, and homes will be on the market a bit longer. When the market is hot with buyers but limited listings, we see offers made well above listing prices and stiff competition. Expectations are for another seller’s market this spring, making it tough on the buyers.
- Interest rates are low, despite the fears of inflation. Over the past six weeks, there was a surge in refinancing activity due to lower interest rates related to Covid variant concerns. By the end of 2022, Mortgage Bankers Association projects that we will see 4% interest rates due to inflationary concerns and monetary policy by the Federal Reserve. There are other factors in play, but the consensus is that rates will be on the rise. Waiting until spring/summer to buy a home may mean higher rates and payments, along with the expected shopping spree of buyers. Acting now helps you avoid homebuying craziness – when the weather turns nice, and the competition turns intense.
- The populated areas in Colorado are experiencing sustained home appreciation – a steady 10% of growth, year over year. Many metro neighborhoods have appreciation levels up to 20%. The longer you wait to buy, the higher your price point will go, until you are under contract. Paying 10-20% more a year can be a hard pill to swallow as a consumer.
We are available to share our industry learnings and expectations with you, while guiding you through the complexities of financing a home during this opportune time. It starts with moving you through the pre-approval process and laying down the groundwork for an accepted offer on your home-to-be. Whether it be your first home purchase, a second home buy, or investment property, we are here to help.
So don’t stop the home shop. Now is the time to buy that dream home on the top of your holiday wish list.