FEBRUARY 2022
SOUTH BAY NEWSLETTER MONTHLY REAL ESTATE INFORMATION
why pre-approval is key for 2022 As a result, bidding wars are still common. Pre-approval gives you an advantage if you get into a multiple-offer scenario, and these days, it’s likely you will. When a seller knows you’re qualified to buy the home, you’re in a better position to potentially win the bidding war. Every step you can take to gain an advantage as a buyer is crucial when today’s market is constantly changing. Interest rates are rising, prices are going up, and lending institutions are regularly updating their standards. You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals such as a loan officer and a trusted real estate advisor making sure you take the right steps and can show your qualifications as a buyer when you find a home to purchase. You've probably heard that it's important to get preapproved for a mortgage at the beginning of the home buying process. What does being pre-approved mean? Why is it important? Everyone knows we're in a seller's market and there is stiff competition for the little inventory available. It's crucial to have a pre-approval letter before making an offer to have a competitive edge. Being intentional and competitive are musts when buying a home in 2022. Pre-approval from a lender is the only way to know your true price range and how much money you can borrow for your loan. Just as important, being able to present a pre-approval letter shows sellers you’re a serious buyer, something that can really help you land your dream home in this ultra-competitive market. With limited housing inventory, there are many more buyers active in the market than there are sellers, and that’s creating some serious competition. According to the National Association of Realtors (NAR), homes today are receiving an average of 3.8 offers for sellers to consider.
In a competitive market with low inventory, a preapproval letter is a game-changing piece of the homebuying process. Not only does being pre-approved bring clarity to your homebuying budget, but it shows sellers how serious you are about purchasing a home. Let's connect to see how we can get this process started!
Owning is more affordable than renting
Not to mention, you’ll lock in your mortgage payment for the duration of your loan (typically 15 to 30 years) and give yourself a stable and reliable monthly payment. When asking yourself if you should keep renting or if it’s time to buy, think about what Todd Teta, Chief Product Officer at ATTOM Data, says: “Homeownership still remains the more affordable option for average workers in a majority of the country because it still takes up a smaller portion of their pay.” If buying takes up a smaller portion of your pay and has benefits renting can’t provide, the question really becomes: is renting really worth it?
If you were thinking about buying a home this year, but already pressed pause on your plans due to rising home prices and increasing mortgage rates, there’s something you should consider. According to the latest report from ATTOM Data, owning a home is more affordable than renting in the majority of the country. In the latest Single-Family Rent Index from CoreLogic, single-family rent saw the fastest year-over-year growth in over 16 years when comparing data for November. Molly Boesel, Principal Economist at CoreLogic, stresses the importance of what the data shows:
If you’re weighing your options between renting and buying, it’s important to look at the full picture. While buying a home can feel like a daunting process, having a trusted advisor on your side is key. Let’s connect to explore your options so you can learn more about the benefits of homeownership today.
Sources: Keeping Current Matters, www.mykcm.com National Association of Realtors, www.nar.realtor CoreLogic, www.corelogic.com Attom Data, www.attomdata.com
“Single-family rent growth hit its sixth consecutive record high. . . . Annual rent growth . . . was more than three times that of a year earlier. Rent growth should continue to be robust in the near term, especially as the labor market continues to improve.” What does this mean for you? While it’s true home prices and mortgage rates are rising, so are monthly rents. As a prospective buyer, rising rates and prices shouldn’t be enough to keep you on the sideline, though. As the research from CoreLogic shows, rents are skyrocketing. The big difference is, when you rent, that rising cost benefits your landlord’s investment strategy, but it doesn’t deliver any sort of return for you.
martin barros 619.254.4007 greatersdrealtor@gmail.com
In contrast, when you buy a home, your monthly mortgage payment serves as a form of forced savings. Over time, as you pay down your loan and as home values rise, you’re building equity (and by extension, your own net worth).
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