Even as the housing market shows early signs of slowing, the Federal Reserve isn’t backing down on interest rate hikes in its race to cool inflation, and with more gains expected, buyers may want to consider getting ahead of the curve now. Not only are borrowing costs rising, but active inventory is steadily declining. New weekly listings have fallen significantly since July and are currently down 17.5% year-over-year, The Washington Post reports.
Though budget-conscious buyers may be hesitant to purchase at a time when borrowing costs and home prices are surging to new highs, they risk facing an even larger affordability crisis if they wait. In addition, a lack of affordability is putting a damper on buyer competition, meaning that for those who can afford for-sale list prices, now might actually be an ideal time to buy.
Would-be homebuyers who have decided to wait for mortgage rates to fall so they can afford to leap back into the market should realize that waiting isn’t going to help — they would just be swapping their too-expensive financing problem for a bidding-war pricing problem as the number of houses for sale shrinks. The best hope for homebuyers now might be to just go ahead and accept the higher mortgage rates and hope to refinance later.
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