Home News I’m a senior economist at Zillow. Here are 3 things home buyers should know about the housing market now

I’m a senior economist at Zillow. Here are 3 things home buyers should know about the housing market now

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In this series, we ask various real estate economists what buyers and sellers need to know about the housing market right now.

Jeff Tucker

Like mortgage rates, home prices are steadily rising (You can find the lowest rates you might qualify here), And many Americans thinking about buying are definitely wondering: what should I expect?So as part of our series I’m currently talking to a real estate economist about the housing market, and for the past 10 years I’ve been studying with Jiro’s senior economist Jeffucker the power to shape the American housing market, including household formation, home ownership, and housing supply. I asked you to share it. perspective.

Buyers need to be prepared for higher monthly costs

Mortgage rates have risen sharply after hitting record lows in 2020, staying close to 3% for most of the last two years and 30 years of mortgages, undoubtedly curbing payments. .. But 3% mortgages are a thing of the past. “Currently, the normal 30-year rate is over 5%, which means that the monthly cost is much higher for a particular purchase price. By searching for a mortgage to find the best interest rate. Significant savings are possible, and with a mortgage calculator, buyers are always on the lookout for what they can afford, “says Tucker. ((((You can find here the lowest mortgage rates you might qualify for.. )

Even as rates rise, there is still a lot of competition in the market

Indeed, demand is still high. According to Tucker, the median seller accepts purchase offers within a week of listing homes for sale. “There are times when the cost of buying a home discourages buyers enough to bring price increases back to Earth, but for now, tanks have enough fuel,” says Tucker.

In addition, demand should remain high thanks to generational demographics, he says. “There is a aging millennial wave at the height of home buying, and baby boomers are more active in the housing market than previous generations. And inventory is 10 years after the collapse of homes in the mid-2000s. There’s a long way to go from these underbuildings to catching up, which means that the reality of supply and demand will continue to put pressure on foreseeable future prices, “says Tucker.

He adds that despite the spring home buying season here and more homes listed, inventories are still incredibly low. The long-awaited seasonal inventory increase finally occurred in March after six consecutive months of inventory declines. “But inventory was less than half of March 2019.”

Buyers should expect competition for the homes they are interested in, as it is still a market for sellers. Confidence in offers that can push them up in highly competitive situations increases, “says Tucker. ((((You can find here the lowest mortgage rates you might qualify for.. )

House prices may cool, but probably won’t go down

Still, he says, this isn’t a bubble and I don’t think house prices will go down. “More new homes will be built, prices will rise, and mortgage rates will rise, which should help cold water hit the market in the near future,” says Tucker. He predicts that this will cool down the price increase, but not the price decrease.

If you’re about to buy now, Tucker says it’s imperative to figure out the maximum budget you’re willing to spend at home. “Currently, the vast majority of homes sell above list prices, so buyers need to give them room to escalate competing offers, if necessary. Otherwise, they repeat. There is a risk of being locked out, wasting valuable weeks of home-finding efforts, “says Tucker.

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