The property market has undoubtedly gone through some significant changes over the last year. After enjoying some of the lowest interest rates, this year they have started climbing back up again, which has left many homebuyers wondering if now is a good time to buy.
Buying a House Now
While we have seen interest rates rising over recent months, we have also seen that house prices have levelled out somewhat.
Following the effects of COVID on the property market, in the last year we have seen the market switch from being a sellers market to being more of a buyers market. Yes, interest rates have increased, but competition has cooled which means that property values have slowed down, allowing buyers to take their time when looking at properties and potentially find something more inline with their budget.
Rising interest rates can put many people off buying, as it does reduce your borrowing power, however, if you already have your finances in order, then rather than waiting for interest rates to come back down (because who knows when this will happen), you ‘re better off buying now when there’s less competition. Remember that you can always refinance later when interest rates do come back down.
Factors Affecting Home Prices
The overall economy
The current state of the economy is having a direct impact on home prices. This is due to the fact that potential buyers are now more cautious with their money.
The cost of living is increasing, so people are having to think harder about their budgets. As a result, demand for homes has decreased, and prices have begun to level out in many markets across the country. If you have your finances in order and steady income, this is good news for those looking to purchase a home.
It is no secret that interest rates have a large impact on home prices. When rates are low, buyers can afford to borrow more, and prices go up as the demand increases. The opposite happens when rates rise, and buyers can afford less, driving prices down.
The effects of interest rates on home prices are already being seen in today’s market. As rates have risen over the past year, home prices have begun to cool off.
Supply and demand can have a big impact on housing costs. When there are more homes available for sale, prices tend to be lower, as homebuyers have more choices and can be more selective when there is a larger housing inventory.
If there is a lot of competition among buyers in your area, be prepared to act quickly as you may find yourself having to outbid other interested parties to get the home you want.
The location of a home can have a big impact on its value. If a home is located in an area with high property values, it will likely sell for more than a comparable home in a lower-priced neighbourhood.
While you may have your heart set on living in a specific area, you have to be open to branching out a bit further, if your desired location is out of your budget. The further you move from the main cities, the more you may be able to get with less.
If a home is in bad condition, it will sell for much less than a similar home that is in good condition. This is especially true in today’s market, where buyers are looking for the best value for their money. Considerations for any renovation or expensive maintenance a property may need, will be front of mind for many buyers.
Getting a property report before buying a house is essential to help buyers discover if there are any hidden issues that could be costly. This information can also help when it comes to negotiating the purchase price of a home.
Is Now the Right Time to Buy
Many would-be first-time homebuyers are wondering if now is the right time to invest in their first property. There are a number of factors to consider before making such a large purchase, and it’s important to do your research to ensure that you’re making the best decision for your situation.
The current state of the housing market is one of the biggest factors to consider when making the decision to buy a home. In many markets, prices are still rising, and inventory is low, which can make it difficult to find a property that meets your needs and budget.
However, if you have your finances in order and have already saved your deposit, then it may be best not to wait. You never know what you could find by shopping for a home in the current market. If you’re ready to buy your new home, contact the team at Mortgage Choice Essendon today to see how you can take advantage of current market conditions.