Mortgages for new buildings in July fell by 27.4%

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Today’s housing market is hard to hack. Not only is the stock of real estate extremely limited, making it difficult for buyers to find suitable housing, but home prices are very high, which means that many buyers cannot afford to move forward with the purchase of a home.

So it’s no surprise that mortgage applications plummeted in July. Last month, mortgage applications According to the Mortgage Bankers Association, new home purchases fell 27.4% year over year.

If you tried your best To buy a house, you may be wondering if you should pause your search for a home. Clearly, this is the path that other buyers are taking. And the reality is that waiting for a purchase has its pros and cons.

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The positive side of waiting

Houses are very expensive now. Average loan size increased to $ 402,440 last month, a new record. And the main reason is that sellers get away with charging more for their homes because there isn’t much competition here.

If you decide to postpone your home search, you can give the housing market enough time to open. In the coming months, we will see more sellers place their homes, and once inventories increase, home prices should start dropping. So waiting to buy a home can benefit you financially.

Also, if you wait for more inventory to show up, there is a better chance that you will manage to find a house that is actually marked with all the necessary checkboxes. If you buy when inventory is low, you may be forced to settle for a home that is not ideal for you, or a home that comes with a long list of necessary repairs that ruins your saving

The other side of waiting

While it might be good for you to suspend your home search, there are some drawbacks to consider. First, we know that mortgage rates looks like right now. We do not know what they will look like in six months. And although there is a good chance that they stay low in 2022 and perhaps even beyond, it is difficult to say what rate you will get if you decide to buy a house in, say, January, compared to right now.

Also, while we would like to hope there will be more products on the housing market later this year, we do not know if this will happen. And if stocks remain stable, house prices may not fall much – or not fall at all.

After all, there is no right or wrong answer here. If you decide to keep searching for a home, you may end up finding that rare home that fits your budget and ticks the boxes you want on your wishlist. Or, you can keep trying to find a suitable place to buy. If you’re going to keep looking for a home, just remember that there is a reason the volume of mortgage applications dropped in the last month – and don’t be surprised if your search doesn’t turn out to be very productive.

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