Housing News

How Homebuyers and Homeowners Can Make the Most of Today’s Market

While mortgage rates may be higher than many people would like, there are still opportunities for homebuyers and homeowners alike…if they know where to look.

Those planning to purchase a home have more opportunities to negotiate a better deal as the number of homes on the market continues to rise.

For those looking to sell their home, it’s about being smart, realizing where the market is now, and not overthinking things.

For homeowners who aren’t looking to sell, there are opportunities to improve their home or their financial situation by tapping into their home equity.

That’s the key to making the most of today’s housing market, according to Ryan Schoen, an analyst at New American Funding (NAF).

In his latest Weekly Insights report, Schoen noted that navigating the market may appear a little tricky right now. That means discipline is paramount for all parties.

“This is a negotiation and education market: buyers gain leverage and sellers must price to move,” Schoen wrote.

What should homebuyers be doing now to make the best deal?

Current market conditions are presenting homebuyers with money-saving opportunities, as some sellers are getting antsy about selling their home quickly.

Schoen notes that housing inventory is still rising. National, active, for-sale listings were at 1.2 million in September, according to Realtor.com data.

Meanwhile, the median days on market has increased to approximately two months, home prices are down just over 1% year-over-year, and more than one in five listings is already carrying a price reduction.

All that combines to give homebuyers leverage to negotiate for a better deal, whether it’s through a price reduction, help with closing costs, or even having the home seller buy down their mortgage rate.

What can home sellers do to ensure their home sells?

Home sellers are facing a market that isn’t exactly clamoring for new homes like it was a few years ago. Schoen notes that pending sales activity is starting to reach a seasonal slowdown.

But that doesn’t mean sales have stopped.

Home sellers need to be cognizant of what’s happening in the market and be prepared to adapt.

“Pricing to the market is no longer optional,” Schoen wrote. “Homes that sit are the ones that ultimately cut price. The data shows pending activity is already contracting; playing the waiting game while rates remain elevated is a risky strategy.”

How can homeowners make the most of their homes now?

Given the market conditions and where interest rates used to be, it’s understandable if homeowners with a low rate don’t want to give it up to buy a new home.

That’s where home equity loans come into play. These loans give homeowners the opportunity to improve their home and turn it into a place they feel comfortable living in for years to come.

Home equity loans, which include cash-out refinances, Home Equity Lines of Credit (HELOCs), and second mortgages, allow homeowners to access their home equity and use that money to make home improvements.

These loans can also help homeowners improve their financial situation by consolidating or paying off higher interest debt, like credit cards. Many also use the cash to pay for college or some other large expense, or even start their own business.

A cash-out refinance allows homeowners to tap into their home equity by replacing their existing mortgage with a larger, new one. They then pocket the difference and can use the money however they like.

A HELOC is a revolving line of credit that allows homeowners to borrow against their home’s equity as expenses come up, instead of taking the entire amount upfront.

A second mortgage can be appealing because homeowners don’t have to give up their current mortgage rate. These loans are similar to cash-out refinances because they involve receiving a cash payment. But instead of replacing the existing mortgage with a new one, they take out an additional loan against their home equity.

Homebuyers, home sellers, and homeowners can each take advantage of today’s market. It just may take a little more flexibility.