With the current US market, is it good to buy a home in the DC metro area?
A few years ago, real estate in Washington, DC, was a hot market. After close to two years of price wars, buyers now have more leverage as the market has cooled down.
Now that the fall season has started and given the current U.S. market situation, you may wonder if it is an excellent time to buy in the DC area.
We’ll look at the current status and the outlook for 2023 to help you decide whether to buy or wait.
Higher mortgage rates have slowed down the market
With 30-year conventional mortgage rates making the most significant three-month jump since 1980, what was once a hot market like DC has slowed down considerably. Rates have jumped 2.08 percentage points between August and November, meaning home buyers have now lost a third of their purchasing power compared to mid-summer.
However, there is some optimism that the rate of rising rates won’t continue at the same level. With significant upward bumps in the recent past, it’s unlikely that we’ll see that again anytime soon. In fact, we experienced some minor drops last month.
Home inventories nationwide are rising quicker than expected
During the fall season, home inventories usually drop. This year may be an outlier because inventories are growing.
Data from Altos Research shows that the number of homes for sale nationwide is going up by 1 percent per week.
With more than 500,000 homes for sale nationwide, buyers now have wider choices compared to a few months ago.
If you’re patient, you might just find the home of your dreams with all the bells and whistles included.
Despite the market cooling off, buyers are still looking
The number of home sales in the Washington area has dropped by 17.3 percent in the first eight months of 2022 compared to a year ago.
As home values level off in many U.S. markets, DC sellers are adjusting to the market.
More sellers are now lowering their original listed price, which is great for buyers. Some Airbnb owners are now selling their properties which makes prices fall further due to more supply.
Buyers may not be making offers, but data shows they are still looking. Buyer traffic viewing properties in the DC area rose in August 2022 compared to last year.
There are good deals out there so don’t stop looking. If you need to finance your purchase you can contact a trusted and experienced Washington DC mortgage broker for a stress-free home-buying experience.
What to expect in early 2023?
The inventory across the Washington area has been expanding since the housing market cooled off. This means that buyers will have more choices and more leverage when buying, something that they have never experienced in years.
There will be less competition among buyers and plenty of good deals available as data shows that more than 40% of all properties on the market in the Washington area this August have lowered their prices.
Washington has more to offer than being the capital city of America. With mild weather and a booming job market, the area has attracted many to move into the Federal City.
You can check out the five best DC neighborhoods of Capitol Hill, Brightwood, Cleveland Park, Columbia Heights, and Logan Circle.
Are you ready to buy your new DC home?
If you are waiting for the perfect market condition before buying your home, it rarely arrives. Given the current market situation, it’s hard to say if the time is right to purchase. It all boils down to your specific situation.
As mortgage rates rise to 14-year highs, many buyers would choose to wait. A monthly survey by Fannie Mae shows that 73% of consumers believe it’s not a good time to buy right now.
With patience, you can get the best deal on your new DC property, as we have seen the market cool off a bit.
The best thing to do right now is to get pre-approved so that you’ll be ready to buy when December comes.
At The Mortgage Option, our loan officers are prepared to assist you.
We can recommend the best loan product that fits your needs. Give us a call or message us to help you get started.
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.