CLERMONT COUNTY, Ohio — Many potential home buyers have hoped last year's housing market would slow down coming into 2022, giving them a chance of getting their dream home.
Unfortunately, many real estate agents report that rising mortgage rates mean the rush for homes is heating up again in the Cincinnati market and elsewhere. They say that spring of 2022 will be as competitive as last year.
Rising rates heating up the market
Denise and Steven Taylor are realtors watching the market go into overdrive for a second straight year.
They said the market took a breather over Christmas, but with the Fed signaling that rate hikes are likely coming this spring, buyers are worried about being priced out.
"Buyers are getting frantic now," Steven Taylor said. "They are starting to look more aggressively for homes because of the fear of interest rates going up."
That is already happening all over the country.
Nationally, the thirty-year mortgage rates are up from 2.5% in late 2020 to close to 4% for the first time in three years. That can add over $200 to the average monthly payment.
On top of that, Cincinnati area home prices rose almost 14% in the past year, making homes even less affordable for many.
Surging rates have left buyers Tim and Rachel Duris, clients of the Taylors, feeling a sense of sudden urgency, having lost out on several homes the past few months.
"There was one home that we were interested in putting an offer in on, and we were going to wait until the next morning, but by the time I texted Denise, it was gone," Rachel Duris said.
The Taylors said some buyers have considered waiting another year, hoping more homes will show up on the market and causing prices to fall. But realtors believe that is unlikely, short of a major recession.
"The prices are still going up," Denise Taylor said. "They are definitely not going to be less next year."
What home buyers can do
So, how can buyers win in the hot market?
The Taylors suggest:
- Getting pre-approved and locking in a rate for 30 to 90 days.
- Making an offer on the spot when finding a good home. Buyers may even have to make an offer based on a virtual online tour without even setting foot in the home.
- Considering the listing price to be just a starting point. They said buyers should make sure they are pre-approved for over the list price.
"We tell them to look at the listing price as a starting price," Denise Taylor said. "It will start there and more than likely go $10,000, $20,000, or more over asking price."
Finally, if a buyer's offer is solid and they want the home, the Taylors recommend putting in what is called an "escalation clause," meaning they come back with a higher offer if someone else makes a higher bid.
It can be frustrating and depressing for those hoping to find a new home this spring. But there is good news about Rachel and Tim and their little girl: They just had their offer accepted on a home that they bid on as soon as it was listed.
Their message is to move quickly and not wait to make an offer, so you don't waste your money.
Don't Waste Your Money" is a registered trademark of Scripps Media, Inc. ("Scripps").
Like" John Matarese Money on Facebook
Follow John on Instagram @johnmataresemoney
Follow John on Twitter (@JohnMatarese)
For more consumer news and money saving advice, go to www.dontwasteyourmoney.com