In a highly competitive market, some buyers may take drastic measures like paying well above the listing price or fast-tracking the closing process. But the one thing you may not want to do is waive
There May Be A Slight Correction In Pricing Real Estate Attorneys And Economists On What Buyers Need
Dated: January 11 2022
Though housing prices have been rising, mortgage rates remain near historic lows — some 30-year rates are still around 3% and some 15-year rates around 2%, as you can see here — though many experts think they will rise. And that’s leading many Americans to wonder what to do about buying a house now. So we asked pros to give you advice on what to know now if you’re thinking about buying.Mortgage interest rates are likely to rise“We are already starting to see interest rates rise and with fears of inflation, this trend can easily continue into 2022. It remains a big question whether a rise in interest rates will bring down pricing given there is such a shortage of housing supply in the country,” says Pierre Debbas, the managing partner of NYC real estate law firm Romer Debbas.He’s not the only pro who thinks interest rates will go up. Daryl Fairweather, Redfin chief economist, says, “I expect mortgage rates to slowly rise to 3.6% by the end of 2022.” This, he says, is because the Fed is tapering mortgage backed security purchases and we’ll feel the effects in mortgage rates. Dr. Lawrence Yun, the chief economist at the National Association of Realtors (NAR), forecasts the 30-year fixed mortgage rate to increase to 3.5% by the end of 2022. Meanwhile, Realtor.com predicts an average mortgage rate of 3.3% throughout the year, hitting 3.6% by end of year; and Bankrate thinks rates could hit 3.75% at some point during the year. “But there will be ups and downs along the way as concerns about slower economic growth creep in,” says Greg McBride, chief financial analyst at Bankrate.The fast ascent of housing prices will likely slowHousing prices rose significantly in 2021 — a nearly 20% rise — and that fast pace will slow, but experts say prices, in general, are still likely to go up. The National Association of Realtors predicts housing prices will climb 5.7% in 2022, while Realtor.com says it’s more like a a 2.9% rise.To be fair, some markets may actually see prices fall. The CoreLogic Market Risk Indicator, which looks at the health of housing markets across the country, predicts that Springfield, Massachusetts; Worcester, Massachusetts; and Modesto, California, for example, are at the highest risk (50-70% probability) of a decline in home prices over the next 12 months.“There may be a slight correction in pricing but if anyone is expecting pricing to come down significantly, they’re going to be in for a rude awakening,” says Debbas.
By Alisa Wolfson (Market Watch)
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