by Maurie Backman | May 7, 2021
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Limited inventory has made buying a home tough. Here's how to be ready if things improve in a few months.
There's a reason so many potential buyers have struggled to buy homes over the past few months -- there just haven't been enough homes to purchase. Housing inventory has reached record lows, and many buyers haven't found homes within their budgets. Other buyers may have found homes, but have lost them in bidding wars.
But the housing market could improve soon. In fact, in a survey of would-be home sellers, about 45% say they plan to list their homes by the end of June, according to Clever Real Estate. That could lead to a much more open market.
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Many homeowners have held off on listing their properties due to the coronavirus pandemic. In the aforementioned survey, 43% of homeowners said they delayed their plans for this reason.
But now that things are improving on the vaccine front and the economy is showing signs of recovery, sellers are changing their tunes. In addition to the 45% who say they plan to list their homes by the end of June, 13% say they'll list between July and August, and another 13% say they aim to list in September or October. A lot of homes could hit the market in the coming months, and prospective buyers should prepare.
If you're a would-be buyer who's struggled over the past few months, put yourself in a strong position to pounce when housing inventory takes a turn for the better.
Once inventory opens up, you don't want to lose out on buying opportunities because you can't get a mortgage. Boost your credit score now by paying bills on time and correcting any errors on your credit report. It also helps to pay off debt -- a lender is more likely to approve you for a mortgage if you have a low debt-to-income ratio.
Though housing inventory may open up in June, home prices won't necessarily come down -- or at least not right away. To avoid getting priced out of your target neighborhood, save for a down payment to give yourself more buying options.
While new homes might hit the market soon, the more focused you are in your search, the more likely you are to succeed. Narrow down the list of features you hope to find in a home. Maybe you don't need a third full bathroom, for instance, and can manage with two.
Right now, heavy competition is making the housing market extremely difficult to navigate -- especially for buyers sticking to a tight budget. Since inventory could open up nicely in June, position yourself to capitalize on that uptick if it comes to be.
Chances are, interest rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase.
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