This month, I will be discussing how interest rates and inflation are affecting the current market. Despite the fact that home prices have stabilized and interest rates have increased, it still makes sense for some buyers to enter the market. Watch my video to learn more. 👆🏼
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📈 Market Update
Interest rates are up temporarily due to inflation. Whenever there is an increase in inflation, interest rates also rise, but when inflation comes down, rates will follow suit. Although housing prices have decreased slightly, there has been a stabilization of home prices nationwide.
One of the reasons why home prices have not come down significantly is due to the low inventory in the housing market. In 2007, there were approximately 4 million homes available for sale. However, in 2034, there are less than 1 million homes for sale despite an increase of 14 million households.
🏠 Less Homes Available
Currently, in the spring of 2023, we should see a lot of sellers entering the housing market, but we are not seeing the expected numbers. The reason for this is that individuals who have a 2%, 3%, or 4% mortgage are choosing to stay in their homes and not sell or are opting to keep their real estate and rent it out. As a result, there are far fewer homes available for sale, and we are witnessing bidding wars happening again.
🤔 Quick Story
I recently spoke with a client who was contemplating whether it was a good idea to buy a home with interest rates in the high 6’s. After reviewing his finances and considering that his rent was $1,400 per month, we calculated that he would end up paying $100,000 over the next 5 years. We both concluded that it did not make financial sense for him to continue renting.
When deciding whether it is the right time to buy a home, it is crucial to ask yourself two questions: Is this the right house, and is this the right time? Renting is a viable option, but it is always a wise financial decision to become a homeowner as soon as possible.
🙏🏼 Thank you for your support.
Thank you for all of your referrals, I feel blessed to work in such a great community. If there is any questions you have or if you are concerned about what is happening in the market and how it may impact you, I’d love to talk. Please feel free to call, text or email me anytime. Take care, god bless.
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