Is a Buyer’s Market on the Horizon? Homebuyers are Cautiously Optimistic

By Terry Cline, Business Banking Market Executive & Knoxville President for Bank of America

After three years of high prices and interest rates that have kept many on the sidelines, prospective homebuyers are feeling cautiously optimistic about where the housing market is headed. According to a new Homebuyer Insights Report from Bank of America, 52% of prospective homebuyers believe the market is better now than it was one year ago, and 75% expect prices and interest rates to fall and are waiting until then to buy a new home.

Other recent data signals that those optimistic prospective buyers might be right to wait – a new report found that home sellers now outnumber buyers by nearly half a million, indicating that a drop in home prices could be on the horizon. In Knoxville, prices may also be poised to drop. 

While we haven’t seen home prices in Knoxville drop yet, prices aren’t skyrocketing. The median sale price has only slightly increased in the last year, according to a report from Rocket.com. 

How can prospective buyers prepare themselves and be ready when the right time to buy comes? The best thing to do: stay positive. It can be daunting to buy a home, but don’t forget to enjoy the process and recognize the wins. It’s a huge milestone that should be celebrated.

Here are some additional ways buyers can get themselves ready:

Prioritize building your credit score: A higher score can give buyers access to better loan terms and lower interest rates, potentially saving thousands of dollars. To boost a credit score, make sure to pay bills on time, keep credit card balances low (ideally under 30% of your limit), and avoid opening new lines of credit. 

Become a saver: Savings will be key when it comes time to cover down payments, closing costs, and all of the unexpected expenses that can pop up when buying a home. The more buyers can save and prepare for the expenses they budgeted for – and those they didn’t – the smoother the homebuying process will be.

Tackle your debt: Less debt means more buying power and lower financial strain during the homebuying process. Prioritize high-interest debt, always make minimum payments on loans, and explore debt consolidation options if they make sense for the situation. 

Get familiar with homebuying in Knoxville: According to Redfin, the average length of time homes in Knoxville were on the market in the past year was 45 days, but that doesn’t mean one can take it slow. Be prepared to move quickly when you find a home you’re interested in buying. Popular homes are more likely to be pending in about 30 days. Getting a mortgage preapproval beforehand can help you prepare your offer and helps to show sellers you’re a serious buyer with the means to purchase the home.

By staying informed, focusing on finances, and maintaining a positive outlook, prospective homebuyers can set themselves up for success and be ready to jump into the market when they feel ready.