Fewer agents say it’s a seller’s market. It may be time for homebuyers to pounce

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Since the second half of 2020, it’s been hard to be a homebuyer. The housing market has been desperately short of inventory since the end of 2020, giving sellers a huge advantage. As such, home prices have hit record highs over the past couple of years, making it difficult for buyers to make the jump to home ownership.

But it looks like things are changing. In fact, in a recent HomeLight survey, only 51% of realtors say it’s a seller’s market, down from 90% previously. And so, if you’re looking to buy a home, you might want to prepare to move forward in the short term.

Why sellers are losing their edge

Although the housing stock has recovered this year, there is still not enough housing available on the real estate market to meet buyer demand. At the same time, however, buyers are increasingly beginning to pull out of the market and say no to sky-high listing prices.

Mortgage rates have risen sharply since the start of 2022. This has understandably scared off some buyers. There is also the fear of an impending recession to consider. For months, financial experts have been warning of a short-term economic slowdown.

Buying a home is a huge undertaking, even in the best financial times. But in a downturn, it can be a scary notion. We can therefore bet that recession fears are also contributing to the cooling of the market.

More: Our picks for the best FHA mortgage lenders

All told, the obvious advantage that sellers once had in the housing market may finally be fading. If you were looking to buy, you might want to plan to make an offer in late 2022 or early 2023.

How to put yourself in a strong position to buy a house

If you want to buy a home in the short term, there are a few key steps to take as soon as possible. First, check your credit report to make sure there are no major red flags, and check your credit score to see what it looks like. You don’t want to find yourself stuck in a situation where you don’t qualify for a mortgage or an affordable rate.

At the same time, work on increasing your down payment to give you more options for buying a home. Home prices are still rising nationally (although they have fallen in some markets), so the more you have set aside for a down payment, the more homes you can explore.

Finally, work out your own numbers to see what mortgage you can afford. As a general rule, your housing costs, including your mortgage payments, property taxes and home insurance, should not exceed 30% of your take home pay. If you want to give yourself an extra cushion, limit this expense to 20% or 25% of your income so that you have more room to cover expenses such as maintenance, repairs and higher utility bills.

READ MORE: mortgage calculator

The fact that sellers are losing their edge is a good thing for buyers. If you’ve been patiently waiting for an opportunity to bid on a home, you might get it soon – so make sure you’re ready.

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