Why Homes These Days Are Selling So Fast

Today’s home buying experience can feel more like an auction than a typical home purchase. Houses are literally going like hotcakes right now, and you might be wondering why. Here are three reasons why homes these days are selling so fast.

Low Interest Rates

The country experienced an all-time low on mortgage rates in 2021, plummeting to a mere 2.65%. While rates have crept a bit higher in 2022, they have remained uncharacteristically low. In today’s market, you can expect a 3% range on your fixed mortgage rate. With abnormally low interest rates, now is an excellent time to buy a home. Even though home prices are relatively high, low interest rates allow people to buy more homes than previously. 2022 is a short window of opportunity for buying a home, however, because rates are expected to rise to 4% by 2023.

Cash Buyers

Because the worldwide pandemic introduced more remote working than ever before, people living in expensive cities are heading to the suburbs in droves. These people have experienced steep home appreciation and are selling their homes for astronomical amounts, which means they are walking away from their houses with hundreds of thousands or even millions of dollars of cash in their pocket. Cash offers can also come from home buying companies. Home buying companies speed up the process because they don’t have to get a loan. Because acquiring and processing funding for a traditional sale takes so long, cash sales cut the time of the sale significantly. Many sellers are also quick to accept a cash offer because they are so low-risk and can greatly hasten the closing date.

Low Inventory

 When Covid-19 put the world on hold, new builds were paused for a time. At the same time, the uncertainty created by the pandemic created a desire for many potential sellers to sit tight and wait it out. These factors have generated an abnormally low housing inventory. As we all know, when the demand is greater than the supply, all havoc breaks loose! Buyers participate in heated bidding wars, offering far more than the asking price and even dropping contingencies. People have been known to list their house and accept an offer on the same day.

The 2021 and 2022 housing markets have placed everyone in a perfect paradox. Low interest rates make now an appealing time to buy, while low inventory and high prices make it an even better time to sell. People are left with a choice—Do I run with the low mortgage rates and buy sooner rather than later? Or do I bide my time and wait for the market to neutralize? As we can see by the quick sell of homes, many people are going with option number one.

Check out this article on how to reach your financial goals in 2022!

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