Due to a persistent short supply of homes, low interest rates, and readily available credit, single-family homes continue to command multiple offers replete with various sweeteners, such as inspection waivers and provisions to cover any appraisal value shortage.
However, homeowners who list their homes at too high a price can still run up against issues of appraisals coming in too low and buyers recognizing the house is
With all these factors in play, what are the qualities, priorities, and needs of the modern American homebuyer?
The State of the Market
The critical importance of location still applies to the current market. Where homes are available, buyers want to be in good school districts and near shopping.
However, agents report that buyers are compromising on their wish list because they become desperate for finding a home due to the low inventory.
Part of that compromise means moving out from central cities and even nearby suburbs to more rural areas. Some local homebuyers are getting priced out of
the market because out of state buyers are relocating to their areas.
Sellers are looking for clean, noncontingent cash offers.
If Sellers accept a financed purchase, they also prefer conventional, fixed-rate financing. Borrowers who qualify for VA or FHA loans are often given less consideration.
The 30-year, fixed-rate mortgage is hands-down the most popular product among borrowers. With interest rates on conventional, fixed-rate loans as low as they are, there is little, if any, advantage for most borrowers to choose an adjustable-rate loan.
While many lenders have programs designed for first-time buyers, most of those programs involve low down payments, and sellers are looking for cash offers or financing with larger down payments.
Other financing options gaining popularity include the Fannie Mae HomeStyle Renovation mortgage, which provides funds for projects ranging from repairs and upgrades
to energy updates and landscaping.
Regardless of the type of mortgage, speed is of the essence.
Higher down payments, offering to cover any appraisal shortfalls, and no home sale contingency will improve the chances for getting an offer accepted.
Homes offering open floor plans, move-in-ready condition, and a good combination of living areas, backyards, and work from home spaces are selling faster and fetch the best prices.
Though some people are choosing to move out of cities, there are still plenty of buyers who want to stay in a municipality. They primarily want to move into a home that offers a new and better lifestyle including more of a yard and child-friendly home features.
With rates expected to move up only slightly, if at all, in the next year or so, and housing inventory expected to remain constrained, the seller’s market for homes should continue for at least the next year.
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