Money Smarts Blog

Snow is in the air, hot cocoa is steaming, and the new year is just around the corner. Yep, winter's officially here — but despite the cooler temps, signs point to a housing market on the verge of heating up.

It’s true the last few years haven’t been easy for homebuyers, especially first-timers. Low interest rates during the pandemic sparked intense bidding wars on a limited supply of houses. Then we saw record-high inflation in 2022, causing the Federal Reserve (our nation’s central bank) to play defense. Federal funds creeped up, and mortgage rates followed suit. But just last month, the Fed voted to cut interest rates by half a percentage point in efforts to keep inflation at bay while encouraging job growth.

What does all this gibberish mean for homebuyers?

Well, nobody can predict the future, but mortgage rates often follow the Fed’s interest rate cuts; meaning, lower rates could help you afford a larger mortgage (don’t forget to check out IHMVCU’s Home Affordability Calculator for a quick estimate). But beware — those lower rates will likely attract more buyers to the market, keeping competition fierce in a very in-demand market.

So, does that mean a housing market recovery is on the horizon? Maybe — but we’d need to see more homes going up for sale to compensate for the current demand. Even with the winter chill settling over our local housing market, don’t let the competition freeze your hopes of finding your new (or first) home. Here are a few tricks to keep in mind:

Start with your credit score. Generally, the higher your credit score, the lower the interest rate on your mortgage will be. Experts suggest a score of at least 620 to qualify for a loan with most lenders.

Get preapproved. This step is an important one to get a real-time financial snapshot and narrow down your price range so you can search for homes that fit your budget. Plus, it shows you’re a serious buyer who can get financing, which can sometimes give you an edge when you go to make an offer.

Recruit the help of local professionals. Choosing a local realtor will not only give you a more personalized experience, they’re also knowledgeable of your local market and well-connected in your community. The same goes with local loan officers, who often have faster processing and closing times, along with quicker solutions to any issues you encounter along the way. It’s always good to have a team of people looking out for your best interests!

Continue upkeep on your current home. It takes more than lighting a pine-scented candle to transition your home into the winter season (although it sure doesn’t hurt). Prepare your home for the colder weather by tackling a few simple maintenance tasks, like disconnecting and draining outdoor hoses to prevent frozen pipes, clearing gutters of trapped snow, ice, and debris, and fertilizing your lawn to protect it from winter damage and enhance curb appeal.

Buying a home naturally brings out a lot of emotions. But as long as you’re prepared and have the right team by your side, it doesn’t have to be so frosty. Connect with an IHMVCU Mortgage Loan Officer to get started today!