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For a while now, house prices have been on the increase. But will these prices continue to skyrocket? Or will they eventually come down? It turns out that there are many things to look out for in the housing market.
So while there isn’t much you can do specifically to maximize your chances for success when buying or selling a home, being well-informed and keeping up with current trends should help you increase your chances overall.
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This post will review the housing market’s current state and future predictions. We will also answer the question on most people’s minds: Should I buy a house now, or should I wait? Keep reading to find out.
Since the start of 2022, there’s been a rise in house prices, despite the increase in mortgage rates. While high mortgage rates should discourage people from buying homes, that hasn’t been the case so far.
The increase in house prices results from one major factor: low inventory. Low inventory means that there are more home buyers than there are homes on the market. Inventory was at its lowest this year, with 25% fewer houses than last year.
In the past months of 2022, we have seen a leap in the median home price. According to the National Association of Realtors, home prices reached a record high of $413,800 in June before falling to $389,500 in August. The price in August was still 8% higher than last year.
If August is any indication for the rest of the year, we might see more price drops. Then again, it’s usual to see a seasonal drop in prices. For the past two years, buyers have had to accept anything they find on the market. But now might be the time to be more selective.
As a seller, it might be tempting to list higher than the market median price. But it will be smarter to slightly undercut that price. That way, you won’t leave your home on the market for too long.
Another thing to watch for is mortgage rates. The Federal Reserve has increased interest rates on several occasions this year. And while that hasn’t really discouraged buyers, there’s bound to be some impact on the housing market. In January, mortgage rates were around 3.1%. But now that they are around 6%, buyers must readjust their budgets and expectations for a house. And there’s no certainty as to whether these rates will stay the same, decline, or rise higher.
Inflation, high mortgage rates, and house prices make buying and selling a house tricky. But make no mistake, houses are still selling on the market. In 2020, homes were on the market for about 22 days. But now, we see many homes sell after a median of 14 days. So consider all your options.
It’s getting more difficult to afford a home and things aren’t likely to change anytime soon. According to latest estimates, prices will be around 16% higher this quarter than last year.
Economists also forecast a 9.8% price increase in 2022 compared to 2021 and a 2.8% increase in 2023. These estimates point to one thing: The housing market is in for a ride. So buyers and sellers might want to make their moves before things get crazier.
Should You Sell a House?
If you’re considering selling your house, there are a few things to remember. First, the market is favorable to sellers who list with the right price. So look at the asking prices on the market and list your home for a reasonable price. Second, you should show off your home in the best light. A little organization and decluttering will go a long way. You can also hire a real estate photographer to help your house shine. Lastly, you need a listing agent that understands the market as you work with that agent to price your home competitively and get buyers fast.
The housing market is currently a seller’s market. There are fewer houses on sale and more willing buyers. So finding your perfect option for the right price among Abilene homes for sale could be challenging. Still, buying a house is a personal decision.
Start by evaluating your financial capacity. Can you afford that dream home? If you can, go for it. You should also have a budget to guide you through your purchasing decisions.
Lastly, here’s a checklist to meet before buying a home:
- Have enough down payment. It’s best to have a 20% down payment to avoid Private Mortgage Insurance (PMI). But if you don’t, it’s okay. Between 5% and 10% would do, but you would have to pay PMI.
- Have an emergency fund to cover three to six months of expenses.
- There should be no outstanding debts.
- The monthly payment for your house should be 25% or less of your monthly income.
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That being said, there seem to be a number of factors that suggest that house prices will continue to rise in 2022. One reason for this belief is that demand for housing continues to increase even as supply remains relatively stable. Additionally, interest rates remain at rates that make it more affordable for people to purchase homes than ever before. And finally, many people believe that the current market reflects a “new normal” where prices are going up rather than down.
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