Buying a home this spring will likely look a little different than house hunting in the past. With interest rates on the rise, and supply and demand off-balance, it’s a difficult time to enter the market. To make things a little easier, we’ve put together a list of the topics you will need to keep in mind before you go looking for your next home.
Current interest rates
First, make sure you’re on track with today’s interest rates and how they’ll affect your home buying plans. You’ve probably heard that fixed-rate mortgage rates are on the rise these days, which is a change from what we’ve been seeing since last year. In contrast, variable rates have remained low. Before you buy your home this spring, you may be wondering if you should opt for fixed rates while they’re still relatively low or take advantage of lower variable rates now.
Your suitability for these mortgage types will vary depending on your situation. This includes aspects of your life, such as how long you plan to stay in your new home and how much payment flexibility you need. You can read more about which mortgage type suits you best here.
Of course, if you use a broker, you’ll have support understanding mortgage rates and where you fit in. Overall, it’s a good idea to keep yourself informed!
Save, save, save
Buying a home this spring means acknowledging the reality of today’s real estate market for buyers: It will be expensive. Even though we’ve seen a slight increase in new listings lately, demand is still outpacing supply. Think about costs like your down payment, mortgage payments, and closing costs, and keep saving accordingly.
You should also do your best to prioritize your credit score. The higher your credit score, the more attractive you will look to most lenders. This means you might be able to take advantage of better interest rates, which will save you more money down the road.
Do your research
Since this market moves fast, it’s important to have a clear picture in your head of what you want. With this in mind, be sure to do some research on the neighbourhoods you’re interested in. Are there other listings in the area that can give you an idea of pricing? Are there schools or transit nearby? Do you have a clear idea of the crime rate? Narrow down areas you want to explore so your house hunt is as focused as possible.
Also make sure you research local real estate agents to find someone who knows the area and will be a good fit for you. The right agent will be a huge help during the most stressful parts of buying, such as submitting offers and negotiations. Their importance can’t be overstated, especially when you’re buying in a busy market!
Compare your needs with your wants
Unfortunately, finding your perfect dream home this spring might be a challenge. First, the supply just isn’t there in a lot of cases, so your options are already limited. Second, the home you want might be out of your reach right now, considering how high prices are. If you find you’re constantly outbid, what should you do?
It’s probably not a good idea to increase your budget if you know you can’t afford it. Instead, ask yourself if you have any flexibility with your housing needs and wants. This might include the number of bedrooms, property size, how recently the home was renovated, etc. Even though this might not be your absolute dream home, buying a home right now might involve some compromise. If you find a home that’s in your price range and close to what you want, it might be best to go for it.
Start now!
Spring is always a busy time for real estate as we head into the warmer months. This year, it might be especially chaotic. While house hunting might be something you want to take your time with, you can’t afford to be too indecisive right now. If you see a home you want, you should be ready to put in an offer right away. Most importantly, make sure you get in touch with a broker! Today’s market is intense, and you will benefit from the professional help I can offer if you buy a home this spring. Between mortgage rates, budgets, and products, I can help you navigate the process to make it as smooth as possible for you.
If you have any questions about buying a home this spring, get in touch with me here!