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Worried about buying? 4 reasons it may not be so bad right now

Are high home prices and interest rates keeping you from buying? Things may not be as bad as you think. Learn why recent changes in the market may be moving in your favor.

JS

Jenny Rose Spaudo

10/26/2022 · 3 min read

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Key takeaways:

  • Markets are beginning to cool down, and buyer competition is decreasing.

  • Fall and winter may provide better buying opportunities.

  • Recent credit score system changes may benefit some buyers.

With high housing prices and rising mortgage rates, many buyers may be hesitant to purchase their next home. But could those buyers be missing out on opportunities in the market? Here are four reasons now may not be such a bad time to buy.

1. Many markets are cooling down

Thanks in part to escalating mortgage interest rates, the housing market is beginning to cool, according to a recent report by Redfin. And some markets are slowing faster than others.

Home prices in September were up 7.4% year-on-year. That number may seem high, but it’s a steep drop compared to the 13.5% year-over-year growth in 2021.

Plus, some sellers are more willing to lower prices to attract buyers. The average home sold for 0.3% below the list price in September, after a year and a half of selling above the list price.

This could be hopeful news for buyers, especially in markets where prices are slowing down in growth — or even decreasing. 

2. Homes are getting fewer bids, which may give buyers more opportunities

Bidding wars are at their lowest rate since April 2020. According to Redfin data, in early 2022, nearly 70% of homes faced severe buyer competition, but that number shrunk to 44.6% by August.

Less competition means you may have a better chance of making a winning offer — without having to bid far above the list price. You may even be able to bid below the list price, depending on your local market. As always, though, be sure to consult with your real estate agent.

3. Fall and winter months are still slower — and may provide better deals

The housing market tends to cool in the fall and early winter months. This could be because of local weather, lower inventory, or buyers not wanting to move during the holidays. Either way, that means now may be an ideal time to start house hunting, depending on where you live.

If you’re worried about buying while mortgage rates are high, bear in mind that you may be able to refinance if rates decrease later.

4. Credit scoring changes could benefit homebuyers

Did your credit score go up recently? If so, it could be because of changes to the credit score system. As of July, most medical debt no longer impacts credit scores. Equifax, Experian, and TransUnion announced that they would:

  • Remove paid medical debt from credit reports

  • Not recognize unpaid medical debts unless they were at least a year old

  • Starting in 2023, ignore medical debts under $500

This may help to increase certain homebuyers’ credit scores and make it easier to qualify for a loan.

This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice. Opendoor always encourages you to reach out to an advisor regarding your own situation.

JS

Jenny Rose SpaudoAuthor

Jenny Rose Spaudo is a freelance copywriter and content strategist specializing in real estate, finance, and tech. She's written for clients like Edward Jones, AAA, Flyhomes, PropStream, and Guild Education, and her writing has appeared in Business Insider, GOBankingRates, Yahoo! Finance, AOL, and more. When she's not tapping away at her keyboard, she's busy enjoying time with her husband and family, volunteering at her local church, or listening to real estate podcasts.

JG

Jena GreeneEditor

Jena Greene is the Managing Editor at Opendoor. She covers real estate, personal finance, money management, and market best practices. Jena is passionate about empowering people to find their dream homes and making the home-buying process a delightful one.