Is it the worst time to buy a home here in Dallas, Texas? I'm sure you've heard it all over the news. The interest rates are rising. The market's going crazy and we're headed to a crash. Today let's dive in a little bit more about what you may need to think about. If you are ready to purchase a home here in the Dallas, Texas area.

I know we're getting that a lot. We've been getting that for the last couple of years, even when the interest rates were low and people were hoping to get into a home, a lot of people were extremely frustrated about making that move, and now here we are with the interest rates, continuing to rise and people are freaking out about that. Instead of looking at your social media, looking at the news, scrolling through YouTube, and finding all that's out there about what's going wrong in the market. Let's talk about some things that you may wanna consider to help you make that smooth move. And by your, whether it's your first home, your second home, or relocating, and actually getting into a home instead of going the rental route.

Housing Inventory - What is a Balanced Market?

In a balanced market, we talk about how there are six to six and a half months' approximately worth of inventory to keep the balanced market. If people have typically been able to go out, look at 10 homes, hopefully, wait for a home to come on the market in their area, but they're able to have options. I remember even when we relocated here and bought our home in Texas, we went and saw 10 homes before we made a decision. We could take a couple of days to think about making that decision. Whereas now we are getting those alerts and three seconds later running out to see the house and writing an offer and hoping and praying that they actually accept it. Not to mention they make you wait three days or five days to get all the offers in to compare notes.  At the height of the pandemic, we had less than one month's worth of inventory. Now here in June of 2022, we're finally getting where we've just crossed over one month's worth of inventory.

The Housing Market Shift

So we are starting to see more inventory. Come on,  more houses for all of these buyers that have been waiting so long to get into a home. We actually have had personally here with our group, we have a couple of buyers that have been looking since September. They didn't want to go in at $150,000 over asking. They had a really good down payment, but they didn't want to waive everything and have to put that additional. $150,000 down. We were seeing offers with 19 or 20 offers. Whereas now we are competing against maybe two or three, and I would recommend communication is key.

If you're not working with a realtor who can pick up the phone, who wants to call the other real estate agent and wants to make sure that they go to bat to get you into that home, that you.  You're just wasting your time. This market is still hot and crazy. People are still jumping to get into a home that they want in the area that they want and you do still have to be proactive, but you're not having to give away your kids or your kidney for that matter to get into a home.  you do have a few more options. We were helping a client last weekend, who we went and saw five homes, and he was willing to put an offer in on two of them.

And we narrowed it down to the one. The agent was fantastic, we ended up getting that offer accepted. He still had options. We didn't go to the one house. He actually had a few that he was willing to pick between,  at the end of the day, working with a great real estate agent will help ensure that you can get that home.

Interest Rates

Now, talking back to these interest rates and everybody's talking about how awful it is, how the interest rates are going up and, oh my goodness. We're never gonna be able to afford a home. Some of these buyers might not be able to qualify for as much as they thought they could qualify for, because the interest rates have gone up, but they're still able to qualify for a good amount.

If you initially had been able to afford a $500,000 mortgage, maybe you need to look around the $450,000 range. That is just a guesstimate. You actually, do absolutely need to speak with your lender to run the numbers, to make sure that you know what you're looking for.  in purchasing a home so that you're comfortable with your monthly mortgage payment so that you actually are not going and putting offers in on homes at three months ago, you absolutely could afford, but things have changed just a little bit.

Knowing those numbers, and having a great lender to work with you on those numbers will just help ensure that you get the home that you want in the area that you are hoping for. Another big thing that we are seeing in this market, as where a year ago, you had to jump in with the best thing that you had, you never saw any price reductions. In fact, things were going so well above asking you never saw homes coming back on the market. All of a sudden, we're starting to see that they said we've seen a 9.4% increase in price reductions on homes on the market right now, which just goes to show people could overprice their homes.

When they went to market, they thought that they could just get the absolute most for their money and get offers accepted well above asking, buyers are starting to run the numbers a little bit and realize, oh shoot, I can't afford that $800,000 house. Now it has to be $750,000. Those homes are coming down a little bit and people are starting to get them priced a little bit more. according to what the current market is. They're not being offered so far above that. They can't afford these homes anymore.

 Being able to see some of these homes come back on the market because suddenly somebody didn't check with their lender to know what they have qualified for anymore, and know that mortgage payment was within their budget.  Having these homes come back on the market, maybe you weren't ready last week, but maybe you're ready this week, and suddenly you have the opportunity to get in and get that home that you might not have had the chance to get before.

Should You Rent?

When you're renting a home, you are always going to be paying somebody else's mortgage. You're going to be completely dependent on what they wanna charge you and if they wanna raise the rent and maybe you can't afford the rent, once you move out and every year they're going to be increasing, because they're gonna be going with the current market, but if you go to purchase a home right now that's when you start building your own assets in your own wealth, when you lock in a mortgage, whether it's 15 years or 30 years, you know what that monthly mortgage payment's gonna be, and your mortgage payment is typically the most important or the biggest payment. You're gonna make it every single month.

And if you know what that payment is, then you can adjust everything else around it.  Locking in that mortgage payment, even if it is for 30 years is a huge bonus, as opposed to being somewhere where you're going to be paying rent. And every single year, you don't know if it's going to go up and if you're gonna have to keep moving.

They're always saying that real estate investments into a home are a long-term opportunity and getting in now so that you know what you're looking forward to, even if you choose not to move for 30 years. Do you know what you're going to be paying? Yes. Your property taxes and some of these fees fluctuate a little bit, but for the most part, the biggest majority, the biggest chunk of what you're paying every single month is that mortgage payment,

And when you're thinking of your interest rate and everybody's thinking, oh, these interest rates are so high. Historically this is still a really good interest rate. And if you buy now and lock your interest rate in, then what if it does go up next year?  You've been locked into this interest rate now instead of having to pay more and say for some reason it does go back down significantly you can always refinance that as well. What I heard in one of our training calls this week was that they were talking about the market and the change in everything and the interest rates and people freaking out and what we can do to help our buyers. Somebody made a good comment that you marry your home, but you date your rate.

Marry the Home, But Date the Rate

So you don't have to stick with your rate. It's kind of like dating. You pick the one you want, if something better comes along, you pick it right until you lock in that mortgage rate and that mortgage payment that you want. say you also get a job promotion, say you have to move out of state. You're going to be selling your home and moving somewhere else anyway.

But if you get that great job promotion and you realize in two years that, Oh my gosh, we can afford that much bigger of a home. Did the interest rate really matter to you anyway? No, it didn't because then you're going to be held to the next interest rate in purchasing your new home.

Find the Right Lender

Another thing we highly recommend is finding a local lender. Wherever you're moving and whoever you're talking to have somebody recommend a local lender that can have your back, that can be there to get your paperwork in on time that can shop around for these interest rates, and find you the absolute best program that will help you.

We work with a couple of fantastic lenders who we can message anytime who will. Make sure that they do everything that they can to help our buyers win in this market. And if you have any questions about that, we can help you too. So looking to buy here in the Dallas area, or relocate, you have questions about the market questions about which area might be best for your family, and how you can go about purchasing your first or your second vacation home.

Let us know, reach out, give us a call, shoot us a text, send us an email, and let us help you make it. Move here to Texas or around Texas, anywhere around the Dallas Fort Worth area. That is much easier.