This year’s record-low mortgage rates sparked high demand
among homebuyers. Current homeowners, however, haven’t put their houses on the
market so quickly. This makes finding a home to buy today challenging for many
potential buyers. With an obstacle like this, those searching for their dream
homes may be pressing pause on their searches as we approach the end of the
year, but that could be a big mistake for many hopeful house hunters. Here’s
why.
According to the most recent Housing Trends Report from the
National Association of Home Builders (NAHB):
“The length of time spent searching for a home continues
to grow.”
The report indicates that 62% of buyers now spend 3 months
or more looking for a home, an increase from 58% one year ago. A primary cause
for the delay is the heavy competition today’s buyers face when making an offer
on a home. Based on recent data from the National Association of Realtors
(NAR), the average house in today’s market receives 3.4 offers before it’s
sold. This means for every buyer who purchases a home, there are on average two
or three buyers who have to begin their search all over again.
Compared to this time last year, the NAHB report shows that
buyers are having more success finding homes in their price range. However, it
also notes the percentage of buyers saying they’re getting outbid when they
make an offer has jumped from 15% to 27%. Buyers are indicating that bidding
wars are a major obstacle to finding their dream home (See graph below):
If this is a challenge you’re up against in your home
search, you’re not alone. Feeling stuck in the process can be frustrating, but
if there’s ever been a year to power through, this is the one. NAHB noted:
“Difficulties finding a home to buy will likely lead 20%
of active buyers to give up until next year or later. That share is up from 15%
a year earlier.”
Experts anticipate home prices will continue to rise into
2021, and the incredibly low interest rates we’ve seen this year are also
forecasted to increase as the economy strengthens. Hopeful homebuyers who
decide to hold off on their search until there’s less competition run the risk
of finding a more expensive housing market when they start looking again. If
affordability is a key motivator behind your decision to buy a home, this
winter is still the best time to make it happen.
Bottom Line
Bidding wars may be one of the greatest challenges buyers
face in today’s housing market, but they shouldn’t be a deal-breaker. Having the
right expert on your side throughout the buying process will give you the
advantage you need when it comes to finding the right home and making a
competitive offer. If you’re ready to buy this winter, let’s connect to discuss
how to position yourself for success.
Source: Real Estate with Keeping Current Matters
