Tomorrow, Tuesday December 21st, is the official first day of winter. For many, this is when it is time to stop thinking about work, stop thinking about school, and focus on family. Christmas is around the corner and then it is a hop, skip, and a jump until it is 2022. Typically, this means it is time for the real estate market to enter a lull. The real estate market is seasonal. Traditionally, more homes are put on the market in warm weather months and more home buyers are active during this time, too. While seasonal trends are important, other trends are more important for home buyers. Mortgage rates and the supply of available houses are more important trends for home buyers to follow. Given what is happening with mortgage rates and housing supply, winter is probably the best season for home buyers. 

Mortgage Rate Trends that Home Buyers Should Watch

Mortgage rates are something that all home buyers should pay attention to if they are deciding whether they should be buying a house. Changes in mortgage rates can make a big difference in how much you pay over the life of your mortgage. In fact, changes in mortgage rates can actually make a larger difference in how much you pay compared to the actual home price. As such, home buyers should be more concerned with rising mortgage rates than rising home prices. 

If you look at today’s mortgage rates compared to historic timelines, then today’s mortgage rates are still near record lows. While mortgage rates are still very low compared to previous years’ rates, they have been creeping higher. Many experts expect that this trend will not change course anytime soon. In fact, they expect mortgage rates to rise even higher in 2022. One reason for this is that the Federal Reserve announced that they expect to make several interest rate hikes in 2022 to try and tackle inflation. In turn, rising interest rates will cause lenders to increase mortgage rates. This is important for home buyers. It means that it is highly unlikely that mortgage rates will be this low again. So, if you have been thinking of buying a house, this winter is the last chance to take advantage of near record low mortgage rates. 

Housing Supply Trends that Home Buyers Should Watch

The other big trend that home buyers need to pay attention to is the available inventory of homes for sale. Housing supply is an important factor for home buyers because it has an outside impact on home prices. If there are a limited number of homes to purchase, then it creates competition between home buyers. This is what leads to bidding wars and home buyers paying more than the asking price. 

Currently, the available inventory of homes for sale is fairly low. Right now, there is only about 2.4 months worth of inventory. This figure tells you that we are sitting in a sellers market. In order for it to be a balanced market between home buyers and sellers, you would need six months of inventory. 

Fortunately for home buyers, there are some good indicators that more inventory will be available this winter. A recent survey suggests that about 65% of potential home sellers are planning on listing their home this winter. Homeowners have watched their home values skyrocket over the past 18-months and many are wanting to cash in on that value by selling them. This change in sentiment could be fantastic for home buyers. If homeowners do put their homes for sale in larger numbers, then there will be more homes for buyers to choose from. It also means there will be less competition from other home buyers, which means you might not have to pay outrageous amounts over the asking price. 

Final Thoughts

Housing markets are always in flux. Real estate markets are influenced by a number of factors from mortgage rates to homeowner sentiment. Even small changes can improve conditions for home buyers or home sellers. Because of the dynamic nature of real estate, it is important to strike while the iron is hot. If you find that the market has shifted to make it favorable for you, then you should act on it. There is no guarantee that favorable conditions will last or get more favorable. 

This winter home buyers are finding themselves in a favorable market. Market rates are still very low, which means that home buyers will save money over the life of a mortgage. At the same time, inventory is about to improve, which means that home prices will level off. Home buyers should take advantage of these conditions before mortgage rates rise. Acting now can save you considerable amounts of money over the life of your home loan. 

If you have been thinking about buying a house and you want to take advantage of market conditions this winter, contact us. The professional mortgage brokers at Peoples Choice Mortgage will help you every step of the way. We will give you a complimentary mortgage qualifier so that you can see where you stand. From there, we will help you all the way until the closing table and beyond. Give yourself the best gift you can this holiday season. Give yourself the gift of homeownership.