What types of deals can homebuyers try to get in the current market?

Couple closing on a home | mortgage rate news

What should I ask for in when negotiating a home purchase?

According to the team at Yahoo! Finance, 42% of homes sold in the final three months of 2022 included a concession of some kind from the seller. That’s up from only 30% in the previous quarter. Incentives included were mortgage rate buydowns, additional cash for closing costs, and warranties on household appliances.

The uptick in concessions should be a welcome sign for home shoppers. The days of waving contingencies and inspections appear to be over, and homebuyers should have more power in the future.

Asking for help on the mortgage rate with a buydown, reductions in closing costs, or even a price reduction are all reasonable to ask for in the current market. It’s also a good idea to keep an eye on how long properties remain on the market. A seller may find additional motivation to sell if they have been unable to find a buyer for an extended period of time.

What are the three biggest challenges facing homebuyers right now?

After a discussion with real estate agents and buyers, it’s clear that there are three key challenges facing homebuyers right now. Higher mortgage rates are keeping buyers on the sidelines, home inventory is still at historically low levels, and finding the right price are still challenges that homebuyers are struggling with in the current market.

The good news is that we’ve seen mortgage rates come off their peak, buyers are finding a bit more success in a smaller market, and home prices are cooling in certain areas.

What do homebuyers expect from the housing market?

A recent survey from NerdWallet of potential homebuyers in America showed that there are several common misconceptions that people are holding onto.

Twenty-eight million Americans plan to enter the real estate market in 2023. On average, they expect to spend $269,200 on a new home. This is about $100,000 short of the $388,100 median home price in December 2022.

Prospective homebuyers are optimistic about home prices, with two-thirds of respondents expecting a crash in the real estate market in 2023. However, most real estate economists disagree. Most are only predicting a small decline, not a market crash.

61% of respondents also stated that mortgage rates are unprecedented. However, over the last 50 years the national average for a 30-year, fixed-rate mortgage was 7.75%. Mortgage rates in the 6%-to-7% range were common as recently as 2008.

It’s clear that educating consumers when they look to dive into the market is absolutely paramount to properly set expectations. Providing context and data to clients will help avoid headaches during the home buying process.

in 10 minutes?

The pre-approval process is lightning fast, and can be completed
in under 10 minutes. Grab a few important documents to get started.
  1. Tax Returns
  2. Copies of W-2s (or 1099s for independent contractors,
    freelancers and the self-employed)
  3. A payroll stub
  4. A bank statement
  5. Loan obligation info (student loans,
    auto loans and credit cards)

Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply. 

All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate. Guaranteed Rate its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.