According to the National Association of Realtors, despite consistently low inventory levels and faster price growth, existing-home sales bounced back across the U.S. as a whole in February after two straight months of declines. The bounce back was led by strong sales in the West and South, with slight declines in the Northeast and Midwest, where the weather certainly did not help in January and February.
Less construction of new homes and very low inventory, along with mortgage rates beginning to increase (they are at their highest level in nearly four years), have many worried about the coming "Spring Market." The concern is that home ownership is less affordable and the process is much more stressful in the current environment. According to Tendayi Kapfidze, the chief economist at Lending Tree, “It’s probably the most competitive spring housing season we’ve seen since right before the housing crisis."
So, the reality is that buyers need to be able to move fast and hit the ground running. The typical listing on Realtor.com now sells 8% faster than it did a year ago, said Danielle Hale, chief economist at Realtor.com. It's more important than ever for relocating employees to be prepared for tough competition if buying in their new location.
Drew Lightowler, VP, Branch Manager of the Plus Relocation Mortgage Team with New Penn, advises, "If you are looking to buy, speak with a mortgage lender or in our case, a relocation specific mortgage lender as soon as time permits. The people who have their 'ducks in a row' and are the most qualified and prepared, are the people that can purchase with the least amount of issues or bumps in the road. It is essential to review the individual circumstances for each potential buyer and make sure they are prepared and have the necessary documentation needed as early in the process as possible."
Kelly House, Plus's Senior Homesale Counselor, works with relocating employees in the process of selling their homes and adds to the advice offered above, "When sellers have their pick of which buyer and offer they want to work with, you need to position yourself as the best qualified and ready buyer available. Sellers will not wait and will not take unknown risks on a buyer when they have better more reliable options to choose from."
This article provides a few key pieces of advice to home buyers heading into spring. Their advice is to:
- Ensure that your finances are in check
- Review your credit report
- Consolidate existing debt
- Decide what type of house you want
- Figure out what you can afford
- Get pre-approved for a mortgage
- Find the right lender
- Don't rely on online
For relocating employees that are selling homes in their departure locations, mobility programs do have some options to consider. Check out our "Choosing a Homesale Program" to consider the pros and cons to the options for providing support to relocating employees. Additionally, consider reviewing our "Home Purchase Benefit Benchmark" to ponder if the support being provided on that side is competitive.
Relocation programs should understand that buyers today are reporting longer-than-expected home-buying timelines. You may well see an uptick in requests for additional temporary housing. Companies might consider being flexible and allow employees to convert costs approved for home-finding trips into extra temporary housing needs. Additionally, relocation programs should work to move internal processes along quickly so as to get the employee in contact with the relocation management company as soon as possible so that expectations can be set and contingent planning can occur. Many times a Plan A and a Plan B need to be considered.
Either way, understand that for those relocating to and within the U.S., the home purchase process may be more challenging than ever this spring and summer!
Not only is that making it less affordable to buy a home for many Americans, it’s also making home purchase process more stressful. This year, perhaps more than ever before, prospective home buyers need to prepare. “It’s probably the most competitive spring housing season we’ve seen since right before the housing crisis,” said Tendayi Kapfidze, chief economist at online lending marketplace LendingTree (TREE)