Though the 2022 housing market is expected to be comparatively gentler, you still need to research the current housing market and carefully strategize to make your dreams of being a homeowner a reality.
Housing Prices May Continue to Increase
In January, the average 30-year fixed-rate mortgage increased to 3.56% from 3.11% in December, marking the highest one-month hike in mortgage rates in the last nine years.
Despite the spike in interest, mortgage rates are still relatively low. This means buyers may hurry to invest in the Long Island housing market before interest rates go up again, resulting in a more competitive market. The consequent hike in housing prices might present a challenge for first-time home buyers.
In addition, last year saw a major inventory scarcity, and if the market continues to remain scarce, prices will keep rising. In fact, Nassau County had a 9.4% hike in prices, while Suffolk County saw a 9.3% increase.
How Does the Long Island Housing Market Look This Year?
Based on the data from the last 12 months, the value of Long Island properties has been in a constant state of fluctuation—increasing nine times and decreasing three times. Between January 2021 and February 2022, the median house value went up by 0.950% to $384,677. But, according to Wallerinvestor’s Long Island real estate market analysis. house prices may drop in the next 12 months.
Should You Buy Now or Wait?
The answer to this question depends on your specific circumstances.
You should probably postpone buying a house if your financial position is not stable enough to afford a mortgage or lock in a low interest rate. If you’re unsure about buying a house, wait until your finances are stable enough to satisfy the 30/30/3 rule. i.e.,
- Ensure that your monthly mortgage payments do not exceed 30% of your household’s gross income
- Have at least 30% of the home value saved up in cash for the down payment.
- The total price of your home should not be more than three times the gross annual income of your household.
At the end of the day, buying a home is one of the most significant financial decisions you will ever make. So, you should first take into account your present financial situation and future life plans. Low mortgage interest rates should not be your only consideration if you are choosing to buy a house now—you also need to make sure you have the secure employment and stable income needed to afford the property and monthly mortgage payments.
If you’re a first-time home buyer trying to purchase a property in Long Island, get in touch with Lynx Mortgage Bank LLC today. Our team specializes in working with first-time home buyers and will guide you through every step of the home buying process.