Home Buying 101: The Housing Market

Throughout the next several weeks we’ll be posting articles and info on various aspects of the home buying process. Topics will cover everything from saving for a down payment, to refinancing, to purchasing investment properties, and more. We encourage you to connect with us on any questions you might have, and to share this information with friends and family!

 

Spring is in the air. Flowers are blooming, birds are chirping, and skies are clearing. Spring is also a time when potential homebuyers start to peek out of their doors and more actively pursue a new home. With the typical springtime bump in inventory, better weather for those heading from open house to open house, and kids heading towards summer break soon, this time of year can be the ideal time to buy for some. With all of the changes we’ve seen in the housing market over the last several years, you may have questions about whether or not this is the “right time” for you…

Should You Try to “Time the Market”?
One problem with attempting to time your home purchase to the business cycle is that no one can accurately predict the future. Another challenge is that interest rates are generally higher during a depressed market and income may not be keeping up. For that reason, fewer people can qualify for a home purchase than in more prosperous times.

The “wait-and-see” strategy generally works best for first-time buyers. People who already have a home usually need to sell it in order to buy their next one. If a “move-up” buyer wants to buy a home during a depressed market, that means they usually have to sell one during the slow market, too. If a seller wants to sell his home to take advantage of a hot market when prices are fairly high, they generally have to buy their next home during that same hot market, so it tends to equal out.

How Do Changes in the Market Affect Supply & Demand?
There are times when the economy is brisk and everyone feels confident about his or her prospects for the future. As a result, they spend money. People eat out more, buy new cars, and…they buy new homes.

Then, for one reason or another, the economy slows. Companies lay off employees and consumers are more careful about where they spend money, perhaps saving more than usual. As a result, the economy decelerates even further. If it slows enough, we have a recession.

During such a time, fewer people are buying homes. When the supply of available houses is greater than the supply of buyers, appreciation may slow and prices may even fall, as happened in the early eighties and the early to mid-nineties.

If you are lucky enough to purchase a home during a slow period, you can be reasonably certain the economy will begin to show strength again. At times, real estate values may even surge drastically. In many regions of the country, this is precisely what occurred in the late eighties and nineties.

What’s the Current Market Temperature?
The past few years have seen a major boom in housing sales. And it appears things aren’t changing anytime soon. Low rates and a relatively low amount of inventory make it a prime seller’s market. Sellers are oftentimes seeing multiple offers for over asking price. What’s the best thing someone can do to buy in the current market? “Get preapproved. Get all of your ducks in a row ahead of time so you know how much house you can afford and are ready to make a quick decision on a home,” says Steven Raymond, Vice President of Residential Lending at USAgencies Credit Union. “The market is very hot. And we’re just heading into spring, which can be prime home shopping time, so it can be pretty competitive out there. Getting preapproved ahead of time ups the chances of a closed sale for buyers.”

The Take Away
Markets slow and surge, as does housing inventory and buyer confidence. No matter what the situation in the market, or in your own family, it pays to be prepared. Knowledge is power. Knowing ahead of time what you’re pre-qualified and/or pre-approved for can help put you in a better position and allows you to make the best decision for you and your family.

 

Questions?
Steven Raymond, VP or Residential Lending at USAgencies Credit Union, has over 30 years of experience in the mortgage industry. Steven’s just about seen it all, as far as mortgages go. If you have questions—about the current market, getting pre-approved, or anything else mortgage-related—talk to Steven!

Steven Raymond 
Vice President of Residential Lending, NMLS#: 234025
Direct: (503) 275-0329
Toll-free: (800) 452-0915 x329
Email: sraymond@usacu.org

Ready to go?
Apply for a mortgage online now.

 

 

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USAgencies Credit Union
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Member Moment: Chandra

 

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Chandra with her 2015 Dodge Journey.

Longtime member Chandra Wilson has been with USAgencies Credit Union for twenty years. She first became a member in April of 1996–the same year as the Macarena, Tickle Me Elmo and the start of Oprah’s Book Club. Mariah Carey & Celine Dion topped the charts and Independence Day was #1 in the box office. In other words… it was a long time ago.

In Chandra’s history with USACU, she’s gone to us for “three or four” car loans… and she thought of us for her most recent auto loan. We asked her to share her car buying experience with us and she happily obliged:

Q. How was the loan application process for you?
A. The loan process is stress-free! That’s why I always use the CU. The loan team has always been supportive. They always are willing to work with me, and do what they can to accommodate my wishes!

Q. What made you decide to go with an Enterprise Car Sales vehicle?
A. I chose to go with Enterprise for a couple of reasons. 1. I felt the company would have reliable cars in excellent condition, and 2. I like to partner with partners who partner with the CU. Justin and the Sales Manager were a pleasure to work with.

Q. What’s your favorite thing about your new car?
A. I love the space, and that is it fitting to my lifestyle! I’m a soccer mom, and need extra seating, and space for equipment! And it has several “secret compartments”!!

Q. How do you feel knowing that we’ll be donating $100 to the Oregon Food Bank by purchasing an Enterprise Car Sales vehicle during our Drive Away Hunger Car Sale?
A. I feel happy, and blessed to be part of an important cause!

 

Thanks for sharing your experience, Chandra! We’re so happy we could help you find a great deal on a car and give back to the community, all in one.

If you have questions about Enterprise, or our Car Sale, give us a call (503-275-0300), shoot us an email, or just stop by. We’d love to talk!