In 2022, it seems that purchasers will face another challenging year in the housing market.
While the market is not likely to be as frenetic as it was this past summer, it is projected to continue to increase in the coming months. Zillow predicts that house values will increase by 11 percent in 2022, down from a predicted 19.5 percent increase in 2021.
According to Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors, the market is becoming more competitive as inventory continues to decline year over year. Concern about increasing mortgage rates is also boosting competitiveness, she said.
To get into the market next year or before interest rates increase, “get your ducks in a row as soon as possible,” she said.
Yes, mortgage rates are likely to rise in the next year, and this is predicted to continue.
Nevertheless, if you are planning on purchasing a home within the next six to nine months, any price hikes should not be considered, according to Kevin Parker, vice president of field mortgage at Navy Federal Credit Union.
According to him, “rates are still historically extraordinarily cheap, and it is still a fantastic opportunity to purchase.” “If someone needs more time, I do not believe they will see a significant difference in cost.”
Take these steps now to ensure that you are in the best possible position while searching for a new house in the next year.
Pay off your debts
When evaluating your loan amount, lenders will consider your debt-to-income ratio, which is the amount of debt you have in relation to your income. According to Lautz, if you have debt, you should aim to pay it off before you begin home searching.
Consider paying it off with any year-end bonus money or monetary presents you get. You should put that money into savings if you do not have any debt to aid with your down payment.
Another essential consideration in obtaining a mortgage and determining the sort of loan you will get is your credit score. It also has an influence on the interest rate you will get and, in certain cases, the amount of money you will need for a down payment.
By checking your credit score ahead of time, you will be able to determine whether or not you will need to make any adjustments in order to attempt to improve your score.
Obtain a copy of your credit report as well, in order to check for any inaccuracies or unpaid debts, which might negatively impact your credit score. Consumers may get a free copy of their credit report from each of the nation’s three main credit reporting companies — Equifax, Experian, and TransUnion — as much as once a week until April 2022.