The real estate market in my town is so difficult. There are very few homes for sale and the local paper writes often about the problem. Rentals for families are also in short supply. This has driven the prices up and out of the range of many buyers. Any medium priced homes are purchased within days.
The principles of supply and demand are very obvious right now. As the number of homes for sale has gone down, the price has certainly increased. When it’s a seller’s market, I always hope that I don’t have to look to purchase a home. Thankfully, our family isn’t looking to buy right now. But, many families are wanting or needing to move.
Rental prices in our town have increased by 1%, but that’s not the case in some very large cities. In New York City, the pandemic has made some drastic changes in the rental prices. When everything shut down, most people worked from home and quickly realized that home didn’t have to be in the expensive apartments in Manhatten. Many people left the city and the rental prices plunged up to 14%. Other major cities around the world also had plunging rental prices.
2020 had many fewer home sales because of the pandemic. The supply was 57% lower than this time last year. April showed a 4.4% drop in pending home sales from March. This information from the National Association of Realtors also suggests that home supply should be improved all over the country by Autumn. The midwest, which has the most affordable home prices, has been increasing pending home sales month after month.
Another important thing to consider when buying a home is the mortage situation. With rising inflation and rising interest rates, monthly mortage payments are going to be higher. Because the NAR’s projection of existing home prices to rise at 9% from last year and interest rates at almost 4%, this will make a huge difference in home affordability.
If you do purchase a home, there are so many papers to fill out and you’ll want to be careful to protect yourself during the closing and exchanging any personal and financial information. There are scammers who might try to intercept your information by email. Phishing is all too common. This checklist can help you avoid problems.
When you are ready to buy, make sure to learn about the housing market in your region and do your homework. Doing the work ahead to see if you’re eligible for a mortage with the calculator tool from MortgageCalculators and for what size and price of home will be the only way to dive into a competitive market. What is the home supply like in your hometown? For buyers who must make a purchase, I hope that they can get a good interest rate and that it won’t rise any more.
@2021, copyright Lisa Ehrman