Every few years the housing market rewrites the rules, and buyers who
learned the last set of rules show up unprepared for the new ones. Right now, the rules have changed more than they have at any point in a
generation. The buyers who understand that are finding deals. The ones who do not are making expensive mistakes.
The
arithmetic here is brutal and worth understanding clearly. A buyer who financed a $400,000 home at three percent in 2021 pays roughly $1,686 per month on
principal and interest. That same loan at a seven percent rate costs $2,661. Those numbers explain why the market froze rather than crashed when rates moved higher. Volume collapsed. Prices mostly did not.
Affordability, by the standard
measure of what share of median household income goes toward the monthly payment on a median-priced home, is near its worst level since the early 1980s. That is a real problem, and it is not going away quickly. But affordability being stretched does not mean prices are about to fall sharply. What it means, practically, is that fewer people can compete for each
property.
Your credit score affects your rate more directly than most buyers realize. A score of 760 or above typically qualifies for the best rate tier most lenders offer. If your score has room to improve, talk to your loan officer about specific steps to raise it before you
apply formally.
The inspection is where the marketing copy meets reality.
Schedule it and attend in person if at all possible. A good home inspector will walk you through what they are finding as they go, and the conversation is often more
valuable than the written report that follows.
Budget enough to cover origination fees, title, escrow, prepaid taxes, and insurance without being caught short at the table. First-time buyers are sometimes surprised by how much cash is required beyond the down payment itself. Ask your lender for a Loan Estimate as early in the
process as possible.
For buyers with the
financial cushion to handle a repair bill without panic, this market is workable, even if it is not cheap or easy. The homes that meet real
criteria at a
realistic price are still moving. They are going to the people who did the homework before they started looking at listings.
Real estate rewards preparation more than it
rewards timing. The market does not wait for the ideal moment, and neither should buyers who have done the work. A look at
real estate listings and pricing data in your target area costs nothing and tells you a great deal.
