The housing market is always evolving, and it can sometimes feel difficult to know when it’s the right time to buy. But the friendly experts at Wintrust Mortgage are always here to guide buyers through the mortgage process, no matter how the market looks.
The last few years in the housing market have been a roller coaster for everyone. We’ve seen both record low interest rates (2.65% for a 30-year fixed-rate mortgage in January 2021), as well as the highest rates in more than two decades (7.79% for the same 30-year fixed-rate mortgage in October 2023)—all within less than three years.1
Despite holding relatively steady since late 2022, interest rates have shown signs of dipping as summer comes to a close. As of early September, average rates for a 30-year fixed mortgage were the lowest since spring 2023, and falling more than 0.5% in less than two months.2 While some experts believe rates could continue to drop through next year (some estimates put rates around or just below 6% by late 20253), there’s never a guarantee that will happen.
More good news for buyers is that there are finally signs of improvement in housing inventory, as more sellers are putting their homes on the market. As of July 2024, unsold single-family homes broke 650,000 in the U.S., accounting for 40% more active listings than one year prior.4
Unfortunately, home prices don’t seem to be significantly dropping as a result—they even continue to climb in some markets.5 Thus, many would-be buyers are instead choosing to start a home renovation project to spruce up what they already have for the time being.
From remodels to home additions, many consumers are finding their dream homes without having to house hunt or move, implementing custom renovations to make their current homes uniquely their own. Other buyers may find it favorable to sidestep the turn-key market by purchasing a fixer-upper instead, putting a personal touch on properties that may require some updates. There are renovation loans available that could benefit buyers who want to go this direction:
- Save time and money. Whether renovating a current home or looking for a new one, borrowers can purchase or refinance a home while securing renovation financing in a single loan. One loan means one application, one closing, and one set of closing costs.
- Flexible options and wide eligibility. Some renovation loans have low down-payment options and flexible credit score requirements, as well as eligibility on a wide range of properties.
- Gives buyers the homes they truly want. Tackle renovation projects both large and small with loan funding, including roofing, plumbing, flooring, landscaping work, and more.
Regardless of how each individual approaches homeownership, there are significant reasons to consider it as a cornerstone of both your personal and financial futures. One report from the Federal Reserve in October 2023 showed that median home equity for U.S. homeowners rose from $139,100 in 2019 to $201,000 in 2022—a more than 44% increase.6 This positions homeownership as a decision with strong long-term financial potential.
While some may be waiting for rates to further decrease, it’s important to look at the bigger picture. Despite promising signs of improvement in market overall, it’s difficult to predict when it will truly be a buyer’s market again. When considering the cost of rent—100% of which is paid to a landlord and never seen again—as well as losing time that could be spent building home equity, waiting for a particular interest rate might not be in an individual’s best long-term interest.
Since it’s impossible to know exactly how things will look down the road, it's important—especially for first-time buyers—to become familiar with the state of the market as well as adequately prepare for one’s own homebuying journey. When rates drop, inventory increases, or home prices fall, planning ahead puts oneself ahead of the pack as other buyers enter a more competitive market.
We may have the perfect loan for you. No matter how the market looks, Wintrust Mortgage offers lending in all 50 states with a wide selection of mortgage products—many of which are exclusive to us or hard to find elsewhere—to help buyers find the perfect solution based on their individual needs. Many products also include down-payment assistance and other incentives for qualifying homebuyers, including grants and tax credits, to widen a home search to cover as much of the available inventory as possible.
One such option is the Wintrust Mortgage HomeReady® First grant,7 which offers up to $6,500 in financial assistance toward a down payment or closing costs8 to eligible homebuyers with no repayment required. Plus, with no property location restrictions and flexible income and credit qualifications, such a program could be just the thing to open new doors for homebuyers in the current market.
The best way to get started is by becoming a PremierBuyer™.9 This offers a better idea of what a buyer can afford and saves time while house hunting. Plus, PremierBuyers™ are more attractive to sellers by proving one is both serious about a prospective purchase and likely to be able to financially follow through. Wintrust Mortgage offers an online application to become a PremierBuyer™ that’s fast, easy, and secure.
