What's driving the housing market?

Spring’s over, but the housing market isn’t cooling down

If you considered buying a new home earlier this year and decided against it, summer may present a great time to try again. Or perhaps you’re officially beginning your house hunt now after preparing during the earlier months of the year. Sellers around the country are offering a huge number of houses for sale, and it’s worth checking back in on the conditions in your market of choice. Pricing and availability differ by state and city, and general trends shift as the year goes on.

Spring trends point toward summer

With spring quickly slipping away and summer starting, buyer-friendly conditions are taking hold across the country. MSNBC reported that as spring went on, there was a marked increase in mortgage applications. While buyers backed off during the very beginning of the year, they have been encouraged by the signs they’re seeing. For instance, in late March, the Federal Reserve predicted it would probably not raise its benchmark interest rates in the remainder of this year. While those rates don’t directly impact the housing market, the announcement still sent confidence through the housing world.

Potential buyers surged into the market and were faced with a slightly larger supply of homes than in fall 2018. Over the next few months, this rise in demand could drive home prices up, though that isn’t entirely certain. Trulia Chief Economist Issi Romem noted that home price changes often take more than a year to reflect market conditions, according to MSNBC. This means the housing market may become less crowded. Such a shift could mean you have to deal with less buyer competition and less aggressive pricing from sellers.

Builders focus on affordable dwellings

If you’re in the market for a first home, you may have felt disappointed over the past few seasons. When available homes opened up, they were often larger and more expensive, better suited to families who have already spent years in a first home. Your wait for a perfect match may be coming to an end, however. Curbed reported that with spring waning and summer on the way, home builders could be reducing prices and building up the inventory of houses that first-time, middle-income homebuyers can afford.

Even if you’ve searched for a new house recently and found your options lacking, it could be a great time to try again, especially with newly built houses. Curbed also revealed that higher sales numbers and lower median price figures among newly constructed homes stand in contrast to rising median prices among existing houses.

With inventory of entry-level houses perennially low among homes already standing, the construction industry is stepping in to fill the gap. This trend may represent a chance to find the home of your dreams, and is a good reason to take another look at houses for sale this summer.

Mortgage applications can start early

It’s not too early to begin the home loan pre-approval process with your First Centennial Mortgage loan officer. As you consider searching for a new house in the summer months, you can strengthen your position with sellers by coming to the table with your loan already approved. Simplifying and shortening the homebuying process are valuable outcomes of pre-approval, and securing your loan early is a great way to know exactly how much house you can afford on the open market. With spring on the wane and summer on the way, it’s time to think about your next home.

Do you have more questions? Contact the loan officer who shared this blog post or send us a message.

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