Believe me, I understand that home inventories are tight across the country. And that is making home buying a bit challenging right now.
Nevertheless, I see a great opportunity in this market for first time buyers, investors, and existing homeowners who want to take advantage of rising equity.
Look at it this way….real wages are moving up, home equity is rising, and interest rates are keeping inflation at bay.
This is a recipe for a strong, long-term real estate market.
A decade ago, the housing market was the U.S. economy’s biggest weakness. Now, it offers crucial support.
The housing market has been trending on a path higher for some time now as it gradually recovered from the financial meltdown nearly a decade ago. Interestingly, it has even gained additional strength lately, despite broadly higher home prices.
This is due to the fact that owning a home right now is one of the better investments you can make.
The benchmark 30-year fixed mortgage hit nearly 5% at the end of April, its highest since early 2014, according to weekly data from Bankrate.com. As recently as September, it was right at 4%.
Still, the economy is much stronger than it was the last time rates spiked in 2013, which means the housing market has more ability to withstand higher mortgage rates than it used to, most analysts say.
As a matter of fact, real wages are up for the first time in 10 years, giving would-be buyers more purchasing power.
Couple that with expected equity increases in those home purchases, this looks to be a fantastic time to purchase.
An analysis conducted by Zillow Research, a division of Zillow Group that operates the Zillow real estate marketplace, found that homes sold faster than ever in 2017 largely due to shrinking inventory.
Rising Rents Means It’s Time To Buy
The analysis has shown that rents have been increasing consistently the past three to four years. In the last year, for example, rents have over increased 4% nationwide.
Per Forbes Magazine: “according to an online survey of more than 1,000 active buyers conducted in early March by Toluna Research for realtor.com, 23% of millennials surveyed indicated that rising rent was a trigger for their home buying purchase.
More from Forbes: “These are the market dynamics and challenges Millennials face especially in urban areas where they naturally migrate.
Craig Furfine, clinical professor of finance at Kellogg School, Northwestern University thinks differently. ‘An alternative viewpoint is Millennials have been reluctant to enter the housing market having witnessed the effects of the housing collapse of a decade ago. Now they see interest rates rising and they think now may be a good time to buy’.
Interestingly, just like their baby boomer parents, many Millennials want that family home with a yard and in a good school system. It seems like the foundation of home ownership desire hasn’t really changed in a long time.
Don’t hesitate to reach out to me for more, as it would be my privilege to help!