I don't know if you have been following the news about inflation. If you have not, and are in the market currently to purchase a home, you need to be aware of this announcement.
In an effort to control inflation, the Fed has announced it will pull back on pandemic assistance and has plans to increase interest rates at least three times in 2022. As a home buyer, this obviously mean your cost to borrow money will increase dramatically. Depending on your credit score, length of loan, and the amount to be borrowed, this could mean tens or hundreds of thousands of dollars more you will pay to the lender over the life of the loan.
This realization will increase the numbers of buyers trying to lock in lower rates before they increase next year. Biddings will increase in higher demand and higher priced areas (e.g. Silicon Valley). The prospects of stiffer competition will rise as buyers reach the conclusion that it may be cheaper to pay more to buy and lock in rates now, then to continue to get beaten out on bidding wars as prices increase as well as the cost to borrow.
Obviously each person's situation will differ based on their individual circumstances, but based on history - when rates rise quickly - buyers tend to bid more fiercely to lock in rates. We all have been waiting for the rates to rise for many years, but the pandemic and the money pumped into the economy rapidly, seems to have finally made that a reality.
