While you can’t control housing inventory or whether interest rates rise or fall, there are several ways you can get a leg-up throughout every step of the homebuying process.
Lock-in your rate: Mortgages come in a wide variety of flavors, some more exotic than others. But in a rising-rate environment, you might want stick with a more “meat and potatoes” approach — the 30- or 15-year fixed. Both lock your interest rate for the duration of the loan (with a 15-year you’ll typically pay a lower rate, but pay more each month). There are a variety of Adjustable Rate Mortgages (ARM) that might offer a low introductory rate, but will adjust to current market rates at a predetermined time in the future (you usually get a fixed rate for a certain time, perhaps five years, and then your rate adjusts every year after that). If rates rise, that means your monthly payment could balloon down the road.
Buy points: You could purchase points, or fees paid up front to lower the interest rate on your loan. Basically, you pay some interest up front in exchange for a lower rate for the duration of the loan.
Work with a real estate agent: A competitive market may not be the best time to DIY. A pro can be very helpful when it comes to navigating the competitive market. The right agent should be an expert in your desired neighborhood, and can even give you a hot-tip about a house that’s about to go on sale before it’s listed. They’ll also tour homes with you and give your brutally honest feedback about prices, structural issues or other red flags.