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If you're looking to buy a home in St. Louis right now, you're probably wondering how inflation will impact the process. With home prices, mortgage rates, and the cost of living on the rise, purchasing a house can feel daunting. But don’t be discouraged! This article will provide some guidance on navigating the local housing market during this inflationary period.
The most important thing to know is that homebuying is still possible in St. Louis, even with inflation wreaking havoc on the economy in general. The key is understanding your budget, acting quickly when you find the right home, and working with a trusted lender to secure the best possible mortgage rate. Here are a few tips.
Factor In All Costs
Keep in mind that your mortgage is just one piece of your monthly housing costs. Be sure to also factor in property taxes, homeowner's insurance, HOA fees (if applicable), and maintenance costs. As inflation drives prices higher, estimate costs conservatively. Also budget for utilities, and factor in commuting expenses if your work location is changing. You want your total monthly costs to be comfortably affordable.
Lock In Your Mortgage Rate
The average 30-year fixed rate mortgage has increased from around 3% or less in 2021 to over 7% now! This major spike does have an impact on your purchasing power. It's important to talk to local lenders as soon as possible and lock in a rate when you find one that fits your budget. Of course, when rates are fluctuating rapidly, you don't want to wait.
Prepare to Make a Large Down Payment
With home prices high right now, making a down payment of 20% or more will help you land better mortgage rates and decrease the amount you have to finance. This improves affordability and shows lenders you are financially ready. For many buyers, coming up with a big down payment means tapping into savings, retirement funds, or family gifts; but the tradeoff will likely be worth it in order to secure a better monthly mortgage payment.
Act Quickly in Today's Market
The number of new home listings in the St. Louis market is currently declining, which means that the homes that are for sale will go fast. Be ready to view homes as soon as they hit the market and make an offer immediately when you find one you love. When necessary, offering more than the asking price and waiving contingencies are common strategies for winning if you find yourself in a bidding battle. Of course, an experienced local realtor can guide you through the negotiations in this process.
Homebuying is still possible in St. Louis right now, despite inflation making life a bit more difficult. By following the tips above and working with a knowledgeable mortgage loan officer and real estate agent, you can navigate inflation and rising rates to achieve your dream of owning a home. Stay patient and be ready to act quickly when you find the right place to hang your hat!
If you’d like to get pre-approved for a mortgage, you can do that here. We would also be happy to recommend some experienced, local Realtors to help you in the homebuying process. Just reach out to us — you can find all of our contact information at https://www.frontierhomemortgage.com/contact-us/