Factors Affecting the Current Real Estate Market
The real estate market today is quite different from what it was just a few months ago. Mortgage rates have risen dramatically impactng the borrowing power of home buyers. The frantic pace of the past few years has also slowed with homes staying on the market for a more "normalized" length of time than we saw during the last few years. With all these changes, many potential homebuyers are wondering if prices will crash. In other words, when is the right time to buy?
There are several factors that can explain why home prices are not crashing despite economic uncertainties and pandemic-related challenges:
Low inventory: There is currently a shortage of available homes for sale in many markets, which can drive up prices as demand outstrips supply.
Interest rates: Despite that fact that interest rates are higher than they were, they are still on the lower of end of where rates have been historically through the years. Many buyers recognize this and continue to take advantage of these rates.
Remote work: The pandemic led to an increase in remote work, which has allowed people to move to areas with lower costs of living, driving up demand in those areas.
Government stimulus: The government has provided stimulus payments and other forms of financial support to households, which may have helped some people afford to buy homes or maintain their current mortgages.
Housing demand: Despite the pandemic and economic uncertainty, demand for housing remains strong, particularly among millennials who are entering their prime home-buying years.
Regardless of these factors, homebuyers should always concentrate on finding the right property for their needs rather than second guessing the market. The market can change at any moment due to some unforeseen and unpreventable event. Buying a home shouldn't be a calculation of time as it’s always the right time to buy the perfect property.