With reliably warm weather and long, sunny days, summer is a great time to start your home-buying journey. What should you expect over the next few months?
It’s been a crazy couple of years in the US housing market. Homes have been selling faster than ever, which means prices (and demand) are up and competition is high. Will this trend continue? Or will the market start to return to pre-COVID conditions? Let’s see what mortgage, housing, and real estate news agencies are saying.
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With mortgage interest rates beginning to creep upwards –the average rate for a 30-year fixed mortgage is about 5% right now – and home prices still soaring, monthly mortgage payments are also increasing. According to a Redfin report, the typical payment has grown to over $2,000.
The same report also noted that pending sales are down about 6 percent. Does this mean the ultra-competitive real estate market is settling down? Will prices go back to pre-pandemic levels?
While prices might come down a bit, competition is still intense. The Motley Fool predicts that housing prices will remain high; even though we are seeing some modest decreases, the market is far from tumbling.
Part of the reason for these historically high prices is that there’s a shortage of housing – not enough to meet the demand of home buyers. And one of the areas where the shortage is particularly intense is in starter homes. However, this could be changing; many younger homeowners are looking to unload their modestly-priced homes while the real estate market is still strong. In fact, 64% of prospective sellers are planning on listing their homes sometime this year, which – combined with an uptick in new construction – may ease the low inventory.
Make no mistake: this is still a seller’s market. Homes are selling fast; according to REALTOR.com, houses are spending 6-10 fewer days on the market than this time last year. To compensate, home buyers are resorting to waiving home inspections and other contingencies or raising their offers to secure a new home. Interestingly, another REALTOR.com report showed that 80% of home sellers got their asking price or above. This indicates just how strong demand remains.
As the data shows, we can expect another hot real estate market this summer. But that doesn’t mean you have to give up on purchasing a home. Our experts provide buying advice here in the blog, and they can also help you put together an affordable mortgage package. Contact your local Mortgage 1 office today or use our Pro Snap Digital Mortgage tool to get started!