In this series, we ask a variety of real estate economists what they think buyers and sellers should know about the housing market now.
Jeff TuckerHome prices have been on a steady climb upward, as have mortgage rates (you can find the lowest rates you may qualify for here), and many Americans who are thinking about buying are no doubt wondering: What should I expect? So, as part of our series where we talk to real estate economists about the housing market now, we asked Zillow’s senior economist, Jeff Tucker — who has spent the the last decade researching the forces shaping the American housing market, like household formation, homeownership and housing supply — to share his perspective.
Buyers should prepare for higher monthly costs
There’s no doubt that mortgage rates are rising quickly after hitting a record low in 2020 and remaining near 3% for a 30-year mortgage for much of the past two years, keeping payments in check. But 3% mortgages are a thing of the past. “Now the typical 30-year rate is over 5%, which means much higher monthly costs for any given purchase price. Shopping around for a mortgage to find the best rate can bring significant savings and using a mortgage calculator can help a buyer stay up to date on what they can afford,” says Tucker. (You can find the lowest mortgage rates you may qualify for here.)
Even with rising rates, there’s still a lot of competition in the market
Indeed, demand is still sky high. The median seller is accepting a purchase offer less than one week after listing their home for sale, says Tucker. “There will be a point when the cost of buying a home deters enough buyers to bring price growth back down to Earth, but for now there’s plenty of fuel in the tank,” says Tucker.
What’s more, demand should remain high thanks to generational demographics, he says. “There’s a massive wave of millennials aging into their prime home-buying years and baby boomers are more active in the housing market than earlier generations. And inventory has a long way to catch up from more than a decade of under-building following the mid-2000s housing crash, meaning supply and demand realities will keep pressure on prices for the foreseeable future,” says Tucker.
He adds that even though the spring home shopping season is here and more homes are being listed, inventory is still incredibly low. The long-awaited seasonal inventory boost finally came in March after six consecutive months of falling inventory, he says: “But inventory was less than half what it was in March 2019.”
Because it’s still a seller’s market, buyers should expect competition for homes they’re interested in. “Being prepared with financing and ideally getting pre-approved from a lender not only can give a buyer more certainty about what they can afford but it gives sellers more confidence in the offer which can push that offer over the top in a competitive situation,” says Tucker. (You can find the lowest mortgage rates you may qualify for here.)
Home prices may cool, but they likely won’t drop
Still, he says this is not a bubble and he doesn’t expect home prices will fall. “The combination of more new homes being built, higher prices and rising mortgage rates should help throw cold water on the market in the near future.” says Tucker. This will lead to a cooldown in price growth, but not a price drop, he predicts.
If you’re trying to buy now, Tucker says it is essential to figure out a budget for the maximum amount you willing to spend on a house. “The majority of homes are now selling above list price, so buyers should give themselves some room to escalate against competing offers if necessary. Otherwise, they risk being shut out repeatedly, wasting precious weeks of hard home searching effort,” says Tucker.
"here" - Google News
June 06, 2022 at 08:55PM
https://ift.tt/oXAg1Ce
I’m a senior economist at Zillow. Here are 3 things home buyers should know about the housing market now - MarketWatch
"here" - Google News
https://ift.tt/xwip6Uk
https://ift.tt/8SPn3Ok
No comments:
Post a Comment