Why You Shouldn't Wait To Buy Or Sell Your House
The real estate market is a rollercoaster of emotions, especially for those looking to buy or sell their homes. The ever-changing prices and market fluctuations can stir up doubts and anxieties. However, if you've been delaying your move due to concerns about plummenting home prices, it's time to rethink your strategy. The data from various sources indicates a consistent upward trajectory in home prices.
Understanding the Home Price Trends
The graph below depicts the trajectory of home prices over the past year:
In the first half of 2022, home prices experienced a significant surge, marked by the green bars on the left side of the graph. These increases were dramatic and seemingly unsustainable. Consequently, in the second half of the year, we witnessed a correction, with prices dipping slightly, shown in red. Unfortunately, the media predominantly focused on these declines, creating fear and uncertainty among consumers.
What has not been sufficiently covered is that in 2023, home prices are once again on the rise, but this time at a more sustainable pace, as indicated by the green bars on the right side of the graph. This is excellent news for the housing market.
Anticipating Future Trends
Looking ahead, it's important to note that home price appreciation typically eases up during this time of the year. This may lead the media to mistake the slowing price growth for falling prices. However, it's crucial not to be fooled; slower price growth still signifies growth.
Factors Driving the Increase in Home Prices
The primary reason behind the resurgence in home prices is the persistent lack of available homes for sale. Despite higher mortgage rates leading to a moderation in buyer demand, they also result in a decrease in the supply of homes. This is attributed to the "mortgage rate lock-in effect." When rates rise, some homeowners are reluctant to sell and lose their current low mortgage rates.
With higher mortgage rates affecting both buyers and sellers, the supply and demand equation in the housing market has been disrupted. However, as more people want to purchase homes than there are available for sale, prices continue to rise. Freddie Mac affirms this, stating that the reduction in supply outweighs the decrease in demand.
Implications for Buyers & Sellers
Buyers: If you've been holding off on buying a home due to fears of declining value, it's essential to understand that home prices are on the rise. Owning a home often proves to be a valuable investment over time, making it a smart choice.
Sellers: If you've delayed selling your house due to concerns about changing home prices, now might be the perfect time to act. Recent data indicates that home prices are turning in your favor, making it a favorable market for sellers.
If you've been postponing your housing plans out of fear that home prices might drop, the data shows a consistent increase in home prices nationwide. Don't let these trends deter you from making your move. For a better understanding of how home prices are evolving in your local area, reach out to us who can provide insights tailored to your specific market. The time to buy or sell may be now, and it's crucial to seize the opportunity when it presents itself.