Home prices have continued to surge despite higher mortgage rates and an increase in housing supply—factors that typically put downward pressure on home prices. But the numbers still show the market is quite resilient, and costly.
(This image was taken from nypost.com)
In June, the national median listing price for single-family homes was $450,000, up 16.9% from the same time last year and more than 31% from June 2020, according to Realtor.com. With homes nearing half a million dollars, buyers are beginning to pull out of the market. Mortgage applications dropped to the lowest level at the end of June, marking the biggest slump in 22 years, according to the Mortgage Bankers Association (MBA).
The current change in the housing market is partly due to the economy at large and consumer sentiment. And right now, the economy is on shifting sands—on one hand, there are signs of a weakening economy as the gross domestic product (GDP) has declined for two consecutive quarters, which some economists say indicates a recession. But on the other hand, the job market and consumer spending is still strong.
Housing Market Predictions for August 2022
(This image was taken from mpamag.com)
Many housing insiders warn buyers against trying to time the market as the economy wades through this period of uncertainty. Housing experts say they are keeping a watchful eye on the economy, which is being pulled in all directions by inflation, skyrocketing gas prices, the war in Ukraine and Covid, to name a few. While housing has been the star of the U.S. economy the last few years, there are signs of wear—namely, rising interest rates making it harder for buyers to access affordable housing. Existing-home sales dropped 5.4% from May to June, marking the fifth consecutive month of declining sales, according to the National Association of Realtors (NAR). However, the median sales price of these homes reached a record high of $416,000 in June, up 13.4% from a year ago. All of this indicates home prices are not dropping anytime soon.
Should You Buy a Home Now or Wait?
Buying a house—in any market—is a highly personal decision. Because homes represent the largest single purchase most people will make in their lifetime, it’s crucial to be in a solid financial position before diving in. Use a mortgage calculator to find out how much your monthly housing costs will be based on your down payment and interest rate.
Trying to time the market or predict what might happen next year is not the best homebuying strategy. Instead, it’s better to buy based on your budget and needs. If you find a home you love in an area you love and it also fits your budget, then chances are it might be right for you. However, if you make too many sacrifices just to get a house, you may end up with buyer’s remorse and an expensive albatross you have to offload.
This kind of market leads us to think about how stock market is operating? to be continued...
By Sunny Wadhwani
Aug 24th, 2022.
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