By Michael Ardolino
According to Long Island housing statistics, the number of listings taken increased nearly 6% since April 2022. Total homes available is also approaching 10%.
As the number of homes on the market increases, it’s important for those thinking of selling to keep their eyes on the real estate market. Fortunately for sellers, things are still in their favor, and forecasters predict it will remain that way this summer and into the fall.
For buyers, this means more to choose from. If you are selling and haven’t purchased your new home yet, you’ll also benefit from inventory starting to inch up.
While other potential sellers may be contemplating the perfect time to put their home up for sale based on their personal plans, if you base your decision on when it’s right in the market, you’ll come out with a better return on your investment.
Heading toward possible stabilization?
A recent article in The Washington Post states, “while mortgage rates and home prices are not expected to drop, they are anticipated to somewhat stabilize.”
Some may wonder if the market stabilizes, how it will remain a seller’s market this summer. According to Shivani Peters, a mortgage advisor and expert, “We have no reason to believe that home prices will stop appreciating … When you own, it’s a gift.” After two record-breaking years, the slight climbs in mortgage rates and home prices aren’t bad news. Prices will still continue to appreciate through the stabilization.
Interest rates continue to inch up to slow inflation — we’re seeing nearly 6% for some 30-year fixed rate mortgages — and savvy buyers want to stay ahead of rising interest rates. For example, a person who bought a home in 2019 valued at $370,000, who put 5% down with an interest rate of 2.87%, would have a mortgage payment of $1,457. Someone who bought a home valued the same in 2022 with interest rates at 5.25%, would now pay $1,940. If they wanted the same type of house that sold for $370,000 in 2019, they would now pay around $500,000 for that home, with 5% down and current interest rates, their mortgage payment is $2,623. Timing is everything!
Real estate and financial experts are keeping a careful eye on The Federal Reserve as the central bank announced a .75% percentage point rate hike on June 15. Jerome Powell, chair of The Federal Reserve, said the Feds may announce a similar rate hike again next month. As I discussed in a past article, just because the rates are going up doesn’t mean they are the highest they have been.
As mortgage rates rise, buyers are less likely to purchase a home at the same price they would have six months ago; mortgage rates are predicted to only continue increasing over the next six. While rates will still be historically low, the best time to sell or buy is now. So … let’s talk.
Michael Ardolino is the Founder/Owner-Broker of Realty Connect USA.