According to the Federal Reserve in a recent article, there is a shortage of homes affordable to first time home buyers. This decrease in supply has caused home prices to rise above the affordable rate for these home buyers. They are all in a waiting mode. Mortgage rates began to rise up slightly this week to 3.47 percent. First time home buyers are losing patience and some are opting to lease. Most area rental agreements have a minimum of 12 months occupancy. This is moving many buyers to renters for at least one year. If the rates continue to climb, some buyers that are waiting may want to wait for the rates to fall back down before they buy a home. I understand from many sources that once the rates start going up, they may not come back down to the historic levels we have now.
Second time home buyers that are waiting for the perfect time to move up may want to make a move now. Home owners that list their homes for sale will increase supply inventory for the first time home buyers. These buyers are out there. As long as the seller hires a savvy REALTOR that understands the market and doesn’t overprice your home, you should have a contract in no time. You will then increase the second home market that has a higher inventory now. Time is of the essence. Once the rates start climbing, I expect the market to slow down. Strike while the iron is hot. The iron is smoking right now.
About the author:
Tom Smith is a licensed Virginia real estate agent and associate broker. He owns Fredericksburg Realty LLC and writes for fredericksburgagent.com. His area of expertise is Fredericksburg and surrounding areas. He retired from law enforcement in 2001 and has been living his dream and passion in real estate for the last 12 years. He is a family man and a life long Fredericksburg area resident. His clients are like his family.