Bidding Wars

Should You Bid More in a Bidding War? Spring brings warmer weather, flowers, the urge to clean, and this season it's bringing with it bidding wars. Not yet experienced in every market, but still being experienced in many major markets (especially on the west coast), the bidding war is back. So how do you handle it if you experience this? Should you increase your offer? Based on the variables at play - home prices, inventory, and mortgage rates, the simple answer is YES - you should increase your offer. Here's why: Home Prices: If you don't get this house, there is a good chance that the next house you find that is similar may already cost a little bit more, and will continue to cost even more as time goes forward. In fact, experts are projecting home prices to increase 5% to 8% in 2013 alone. Inventory: If you don't get the house you are bidding on, it may be difficult to find one that is similar in a short time frame. The national inventory of homes has fallen to below five months. Mortgage Rates: Interest rates are poised to inch up through 2013, eating away at the affordability of a home. There is a good chance we will see rates back in the 4% range by the end of the year, greatly affecting the 'cost' of a home. Last Week's Mortgage Rates Recap Last week we ended the week with technical indicators pointing to possible higher rates this week. Rates were up just slightly (often times just some decrease to pricing rebate rather than actual mortgage interest rate increase) at the end of the week. As has been a constant trend lately, volatility was experienced throughout the week. This Week's Mortgage Rates Forecast Risks Favor: LOCKING This week promises to continue the recent trend of volatility. As shown in the chart above, we start off the week with the technical indicators all pointing to an interest rate increase, probably of .125% or maybe as much as .25%. Just when we see the shoe drop is the question. This week for any consumers who are less than 30 days from closing, we advise to lock. This week already appears to be one of a rising interest rate environment, and along with a number of key economic reports. BOTTOM LINE: Lock in these low rates and don't look back.                                         RateAlert’s Most Trusted Mortgage Loan Officers MLOs that subscribe to RateAlert’s Executive service have the training and market knowledge, along with the data at their fingertips, to expertly help you navigate the difficult and sometimes treacherous process of obtaining home financing and securing some of the best rates the market has to offer. If you would like to learn more about how to time the market to obtain the best interest rates, don’t hesitate to contact the MLO who sent you this commentary. Find us for all your home loan needs at globalhomefinance.com.