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It’s easy to get overwhelmed by the housing market. We asked Tammy Klemmer, vice president – senior mortgage loan officer at Johnson Financial Group, to share her advice for potential buyers.

What can homebuyers expect this year?

In 2023, homebuyers experienced increases in home prices, low housing inventory and higher interest rates. Families reconsidered their homebuying decisions due to the rapid increase in interest rates. Some buyers experienced a decrease in buying power, taking them out of the market all together. Other buyers were hesitant to buy at a higher interest rate and attempted to time the interest rate market, potentially missing an opportunity to get an accepted offer, at a fair price, with fewer buyers (less competition) in the market.

The good news is interest rates have improved, so if you’ve been on the sideline, now may be a good time to begin your homebuying journey. Everyone is keeping an eye on market conditions and the Fed, anticipating additional rate decreases throughout 2024. However, we need to remember, not all homeowners bought at the historically low interest rates a few years ago. Many of them refinanced as those rates decreased. Refinancing into future low rates is much easier than trying to outbid other buyers to get a new home. Knowledgeable loan officers are able to provide updates and guide homebuyers on these trends. It is important to stay close to their trusted partners to learn more.

Is now a good time to buy?

Real estate is generally going to provide a solid return and is a good investment over time. Homeowners build equity and wealth, while renters pay someone else’s mortgage and are helping others build their wealth and equity. Remember that 0% of rent paid goes toward your personal wealth.

Keep in mind the market is constantly changing and can shift quickly. It’s impossible to predict, so while being aware of market trends is important, it’s even more critical that you prepare and plan for what is best for your lifestyle and goals.

For people who are on the sidelines due to the rise in interest rates, it’s important to remember homeowners have the ability to refinance their existing mortgage. So when interest rates improve, you’ll have the option to refinance to lower your rate, save money on interest and/or reduce your payment. You can refinance multiple times and with no pre-payment penalties.

What steps should someone take if they want to buy?

Build a relationship with an experienced loan officer and Realtor. This relationship is more than asking the questions or checking the boxes a so-called industry article tells you to ask. Work with professionals who engage in a conversation and listen to your life plans and goals. They should be a partner in your journey to buy your first home, next home, vacation home or investment property. This way, you’ll be ready to write an offer when you find your new home.

Get a fully underwritten pre-approval, which includes verifying your credit, income and assets. Often, having this pre-approval from a local lender is an advantage with the listing Realtor and seller as they are familiar with the quality of the lender. That can make you more appealing than other buyers.

What financing options are available?

There’s an array. Programs may provide homebuyers with flexible down payments, terms and rates. Today’s buyers can even find options tailored for their specific professions. This is why it’s important to talk to a knowledgeable loan officer who is committed to understanding your goals and providing the best financing option to help you meet them. 

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