Home News Time to Buy a House? High Supply, Low Prices Help, Veteran Says

Time to Buy a House? High Supply, Low Prices Help, Veteran Says

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  • Buyers are beginning to reap the benefits as the supply of new homes increases while prices begin to fall.
  • Market Intelligence and ATTOM’s Rick Sharga analyzed what he sees in the market.
  • Here are some things to consider for those thinking about when to buy a home.

These days, trying to buy your dream home can feel like a nightmare.

“This was probably the strongest seller’s market I can remember,” Rick Sharga, EVP of Market Intelligence at real estate data firm ATTOM and a longtime real estate market observer, said in a recent interview with Insider. ‘ said. “All the terms were really in favor of the seller.”

Buyers were unreliable land at home Even if you bet your savings last year fierce bidding warHome prices have skyrocketed for many reasons. rushing to move Thanks to remote work, near-record low mortgage rates have made borrowing cheaper and well-funded foreign buyers gladly When can snap properties serious shortage Because both labor and materials were in short supply.

But Sharga told Insider that there’s reason to believe there are better days ahead for homebuyers.

A surge in supply drives down prices and increases competition

While some of the aforementioned catalysts for house prices have faded, one of the most impactful is the fact that shortages are easing. New housing supply suddenly roseaccording to Data from the Federal Reserve.

New housing supply U.S.

St. Louis Federal Reserve Bank

With more new homes on the market, put downward pressure on prices Of those homes, US Central Bank data shows.

ASP new housing U.S.A.

St. Louis Federal Reserve Bank

Interestingly, Decline in new housing prices Even if housing prices rise stay upliftedShalga said so probably Current homeowners reluctant to move Home loan interest rates soarThis limits the supply of existing housing available and keeps prices going up.

The rise of new homes not only made homes cheaper, but made the whole process easier. lose. homebuyer under extreme stress.

Mortgage Rates May Retreat — (Almost) A Good Sign

Rising mortgage rates are a double-edged sword for hopeful homebuyers. Higher borrowing costs make it more expensive to buy a home, but it’s worth remembering that other buyers are in the same predicament. The bright side of higher interest rates is that it causes some would-be buyers to abandon their search, ultimately leading to lower home sales and lower prices.

That duality is fully evident as mortgage rates have surged this year.

30 year mortgage interest rate

St. Louis Federal Reserve Bank

30 year fixed rate mortgage Currently around 5%, up from just over 3% at the start of the year, according to Fed data. Such jarring rises are historically rare, he said, Sharga.

“It is very unusual and almost unprecedented to see mortgage rates rise at such a high rate in such a short period of time,” Sharga said. “It’s the biggest leap we’ve seen since the turn of the century, and probably the biggest since the 1980s.”

Predictably, however, the sharp rise in borrowing costs has terrified potential buyers and helped cool the red-hot property market. Goldman Sachs data released in an Aug. 3 memo showed June sales of both new and existing homes were down 8.1% and 5.4%, respectively, from the previous month, while overall housing activity was down. 10% less.

Rising mortgage rates played a central role in the “significant slowdown in housing activity,” Lotfi Karui, chief credit strategist at Goldman Sachs, said in a note. Sharga agrees, telling Insider that “rising mortgage rates really put the brakes on the market.”

House Hunter is a home loan interest rate I slipped a lot from late June and should go down more Up to 4.5%, according to Bank of America. Unless lower interest rates drive competitors out and push prices higher, this should benefit buyers.

Pay attention to weaknesses instead of buying based on price predictions

Buying a home is typically one of the biggest and most important decisions an individual or family will make in their lifetime, but there is a point where overthinking it can pay off.

Of course, homebuyers should keep a close watch on mortgage rates and home prices, but Sharga says it’s impossible to predict exactly when and how big fluctuations will be, so it’s usually a volatile market. Timing is not recommended.

“There is a saying in the real estate industry that the best time to buy a home was 15 years ago and the second best time is today,” says Sharga. “Because those people Expect big price drops Usually disappointing. ”

Waiting for house prices to fall is almost always a losing strategy for people who are ready to buy a home, Sharga said. But he acknowledged that unusually high volatility may make sense for homebuyers to be patient now instead of jumping home.

“In today’s market, mortgage rates are volatile and price appreciation is likely to slow down a bit, so if you can’t find a comfortable home in your price range, it might make sense to wait. Let’s see if market conditions improve between now and the end of the year,” Sharga said.

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