All across the country, home buyers are struggling to purchase a new house. When we see what’s happening in the market, it’s easy to see why:
Average changes in July 2020 vs July 2021
Inventory is down – 33.5% fewer homes on the market
Homes are selling faster – 22 days less on the market
Home prices are increasing – 10.3% more expensive
It’s a sellers’ market almost everywhere. Some metro areas are even more competitive than others. Austin-Round Rock, Texas has seen a 44.0% decline in active listings while prices increased 36.6% in the last year. Hartford, Connecticut shows a 59.8% decrease in active listings and a 13.7% median listing price increase – plus new listings are on the market 14 fewer days than they were in June 2020.
Consider this as well – Many homeowners took advantage of low interest rates to refinance their homes in 2020. If rates continue to increase, will inventory remain low? Will homeowners want to sell a home they negotiated such a low interest rate for?
Don’t give up hope on getting a new home
It’s hard, but not impossible to get an offer accepted on a home. Work with your local home lender to make sure you’re able to put in an offer that’s fair, competitive, and in your budget.
And if that doesn’t work? Then it’s time to look into a building or renovating a home!
They’re short-term (usually 12 to 18 months) loan used for the materials and labor needed to construct a home. Sometimes, the funds are also used to purchase the lot the house will be built upon. The interest rate for a construction loan is typically around 1% higher than mortgage rates, but they are variable. So, the rate may change throughout the loan term.
To make the loan even easier, you can select a one-time close. That means you’ll get approved to finance both construction and mortgage for your new home at the same time. After construction is complete, your loan automatically becomes a traditional mortgage. There is one loan and one closing.
Smaller lenders, like Mann Mortgage, can offer construction loans with much lower down payments than big banks.
Renovation loans can be used two ways: to buy and fix a new home or to refinance and update your current one.
Savvy buyers will use a renovation loan to purchase an ugly house that’s lingering on the market, then use the additional funds to renovate it to make it what they want.
Shopping in a sellers’ market is stressful. Rather than burning yourself out searching for a home, use a renovation loan to update the home you’ve already got. Renovation loans can fund remodels, surface updates, and additions to your current home. It’s a great way to get an updated home without having the pressure of competing with other buyers.