CLEVELAND — During a recession, home prices typically fall. But not these days. Not only are prices remaining steady, but with mortgage rates hovering around 3 percent for a 30-year fixed loan, people are fighting to scoop up property.
"What we're experiencing right now, something I've never experienced in my 27 years," says Bill DiCapua, Senior Loan Officer with Union Home Mortgage.
Sellers are receiving multiple offers and buyers are getting more bang for their buck.
“They may be able to buy a house today that they couldn't buy two years ago,” DiCapua says. “Because the rates were higher and they didn't qualify."
It's why Chelsey Bryant is looking to get her very first home, something she's wanted to do forever. But, because of how hot the market is, actually buying one is another story.
"We went to go see a house,” she explains. “It wasn't even on the market for 24 hours. So, I went and I toured it. I loved it. Once I got back, we started to get the paperwork together. Before we could even submit it, they accepted another offer and it was under contract."
That was the third house she was interested in but didn’t get. And it’s pretty common these days as are bidding wars.
The other reason behind the fierce competition is the lack of inventory, which real estate analysts blame on two things: Boomers staying in their homes longer, and fewer starter homes built over the past year, which has priced out many buyers.
Ann Lee Rindskoph, a real estate agent with Re-Max, says “It's really important to be ready to rock and make an offer when you find the perfect home."
That's why you should get pre-approved for a loan before you search by shopping multiple lenders...particularly ones that specialize in mortgages.
“When you go to a dedicated mortgage professional, that's all they do,” she says. “Often times they have better products, better programs and rates.”
Now, while low rates have opened the market to more interested buyers, credit scores are still king. And many people’s credit was hurt during the COVID pandemic. DiCapua says, “The only thing that we could possibly do is we take a look at their situation and then we're going to give them some guidance. If they made a mistake, they missed a payment, if we can still get them approved, that just might need to be a letter of explanation from them as to what happened, subjective to an underwriter's decision.”
For many, buying turns out to be a much better deal than renting, especially here in Cleveland where rents are soaring.
Chelsey says, “Whenever you're renting, you have a smaller space and you're still paying a decent amount. A lot of the times it can be the same amount that you're putting towards your mortgage. Granted, you're not paying all the utilities, but at least whenever you have your own home, you have the freedom to customize it.“
It's why, despite the difficulty in finding the right home, Chelsey’s not ready to give up on her dream.
"It's an exciting process,” she says. “Just stressful.”
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