Over the past year, the real estate market has been the very definition of a sellers market. Home sellers have had every advantage and home buyers have been struggling to compete with each other over the few homes that are for sale. Home buyers have found themselves in bidding wars, and those that win end up paying far more than the asking price. Understandably, many home buyers have been frustrated by their search to find the perfect house. Thankfully, good news is on the horizon. The winds of change are blowing and home buyers soon will not find themselves caught between a rock and a hard place. Things are starting to look up for home buyers, which means that now is the perfect time to prepare to buy a house. 

The Data on Housing Inventory

The biggest frustration for home buyers has been all on the supply side. There is plenty of demand to buy a house right now. Everyone recognizes that buying a home right now is a tremendous value because of rock bottom mortgage rates. People want to buy houses, there just have not been that many available over the past year. Thankfully, that is starting to change. 

Home buyers and home sellers are not the only ones who have recognized the lack of inventory in the market. Home builders reocgnize this reality and are rushing to meet home buyer needs. New housing starts have increased in the past months to levels we have not seen until 2006. 2006 is an important market because it was the runup to the last real housing boom we have had in our nation. This is a big indicator that home builders recognize the opportunity that exists right now to sell homes and they are trying to fill the inventory void. Additionally, it is not only housing starts that are on the rise. Permits for home building projects are increasing dramatically, as well. This means that continuous waves of new homes will soon be entering the market. 

Now, it is important to understand that building a home takes time. Over the past year, it has taken longer than usual. The pandemic and the various lockdowns wrought havoc on building schedules as entire home projects ground to a halt. Once lockdowns were lifted, home builders then had to deal with a shortage of materials and a spike in prices. Thankfully, these hold ups are also getting resolved. Lumber prices have been dropping steadily over the past couple of months. In fact, lumber prices dropped 40% in the last month. This is great news for home buyers. It means that home construction will be picking up pace and that home construction will be much cheaper. Part of the upward pressure in home prices that we have all been witnessing is because of how expensive it has been to build new homes. 

Lenders are Easing Mortgage Requirements

Another piece of good news for home buyers is that lenders are making it easier to qualify for a mortgage. Lenders have noticed that mortgage applications started to dip from last year’s numbers. In response, they are relaxing some of the strict standards that they have been using for the past year. Many individuals have wanted to take advantage of the low mortgage rates over the past year, but did not meet the standards in place. These changes by lenders just might provide the window that many potential home buyers need in order to get the homes of their dreams. 

Final Thoughts

The tide is beginning to turn for home buyers. What was once an extremely difficult real estate market for buyers is now starting to present more and more opportunities. This is welcomed news and it means that the time to prepare for buying a home is right now. While it will take some time to get this inventory into the marketplace, it is best to have all your ducks in a row so that you can hit the ground running when it does. One of the best things you can do is to meet with one of our professional mortgage brokers and try to get pre-qualifed for a mortgage today. Getting pre-qualifed for a mortgage helps you tremendously with your home search. First, it helps you set your budget. Second, it lets home sellers know that you are serious, which will make your bids more attractive. 

Trying to get pre-qualified for a mortgage right now is far better than waiting until the market turns completely into a buyers market. In the event that you do not get pre-qualified, you want to know exactly what is causing lenders to balk at your financial situation. Knowing your weaknesses now is a good thing because you have the time to improve on them. Our team at Peoples Choice Mortgage firmly believes that everyone deserves to be a homeowner. That is why we are committed to working with everyone who wants to buy a house, even if you are not able to do it at this specific moment. If your credit score or your debt-to-income ratio is holding you back, that’s okay. We can work together to come up with a plan that works with your needs to eventually get you to where you want to be. 

The bottom line is that even if you have been frustrated by your home search over the past few years, you should not give up on your dream. The real estate market is starting to shift in your favor. Now, it is just up to you to take advantage of the situation.