Becoming a homeowner can be challenging enough under good circumstances.
Add in higher mortgage rates, elevated home prices and unrelenting high inflation — i.e., the current home-buying environment — and it may feel decidedly unattainable.
The average rate on a 30-year fixed-rate mortgage has been trending above 7% for most of October, more than double the 3.3% heading into 2022, according to Mortgage News Daily. Meanwhile, the median list price for a home in the U.S. was $427,000 last month, 13.9% more than a year ago, Realtor.com’s latest monthly report shows.
However, conditions generally appear to be shifting in buyers’ favor as demand continues to fall. In the face of higher interest rates — which makes payments less affordable and reduces the pool of potential buyers — median home prices have been sliding on a monthly basis since hitting an all-time high of $449,000 in June, according to Realtor.com.
While it’s impossible to know with certainty where home prices or mortgage rates will be in the coming months and years, there are ways to make sure you’re in the best financial position possible to enter the market as a buyer, whether soon or down the road.
Know how much home you can afford
The first thing to do is figure out how much home you can truly afford, experts say. This means having a good handle on your current financial situation.
“Understand your current budget … what are your expenses, how’s your spending, would you need to make changes,” said certified financial planner Sandy Higgins, senior wealth advisor with Capstone Financial Advisors. The firm, based in Downers Grove, Illinois, ranked No. 77 on the 2022 CNBC Financial Advisor 100 list.
Contact Us
To get started with buying a home in the Central Valley, contact us today by calling (209) 831-9747 or click here!