n 2020, mortgage rates plummeted to an all-time low, creating an opportune moment for prospective homebuyers and investors. With a housing shortage already at hand, available homes for sale became scarce. This increase in demand and shortage in supply produced a hot housing market and home prices soared higher than they have in years. But are things finally starting to cool off? Here’s what first-time homebuyers need to know.
Is the Housing Market Finally Slowing Down?
Even though mortgage rates were low, the last two years created a challenging situation for first-time homebuyers. Investors and remote workers were snatching up homes fast. And first-time homebuyers, who are often at an economic disadvantage due to having fewer savings, simply could not compete. Home prices surged and buying a house became harder and harder to afford. Many first-time homebuyers were priced out.
But now, after two years of chaos, it seems like the situation might finally start taking a new direction. While there’s no way to tell for sure what will happen in the future, there have been some subtle indicators that the housing market is finally cooling off.
Signs that May Indicate a Cooling Housing Market
The housing market is still going strong right now. But there has been some evidence that the situation is changing. Here are some signs that may indicate a cooling housing market:
- More homes for sale: There have been a slight uptick in the number of homes for sale. Though housing inventory is still low, it has increased slightly in the past few months.
- Lower home prices: Home price cuts could indicate a cooling market.
- Real estate layoffs: Real estate companies have been making layoffs because they no longer have the same volume of business that they did a few months ago.
- Fewer mortgage applications: There have been fewer people applying for loans. This is likely due to the increase in home prices and mortgage rates.
- Fewer people interested in buying: Right now, it seems like fewer people are shopping for a new home. Though the demand is still there, many people feel like they can’t afford the high home prices we’re seeing today.
Advice for First-Time Homebuyers
If you’re a first-time homebuyer, then you may be in luck. A cooler market is a great time to buy a home. Inventory increases and prices are lower, allowing new homebuyers to get more bang for their buck.
Call Mortgage Solutions Financial today to apply for a first-time buyer loan.