The real estate market in the U.S. is red-hot right now, making it tough for potential buyers to land deals. Prices are rising due to declining rates in supply. Amid the pandemic, average U.S. house prices increased 17.2% from March 2020.
The constraints on supply will ease following the end of the pandemic. However, the demand side can expect the lack of affordable housing to reduce potential purchases. The increase in home prices is good news for homeowners but sobering for prospective buyers. As the housing market experienced strong economic activity throughout the pandemic, mortgage rates fell to numerous record lows in 2020.
Many buyers took advantage of lower borrowing costs and snapped up the majority of the market’s available supply. “Homebuyers are experiencing the most competitive housing market we’ve seen since the Great Recession,” said Frank Martell, CoreLogic CEO. “As affordability challenges persist, we may see more potential homebuyers priced out of the market and a possible slowing of price growth on the horizon.”
Buyers may need to take a pause in their decision-making process. This will allow them to analyse their current income stream and the new location they are considering buying a home in. Moreover, this will provide insurance that the stability of their personal situation warrants home ownership. “I have been in the business for more than 30 years and I have never seen a market that has been this hot,” said Glenn Brunker, president of Ally Home. Ally Home provide mortgage services and products and believes that the market is currently very tight. Prospective buyers should take this time to figure out their budget, find a good real estate agent and get a mortgage pre-approval.
