The real estate market. There has arguably never been a better time to sell a home but it has been an interesting process to buy a home since the pandemic.
This is because, in the last year, the median house value in the United States increased by 16.2 percent. Currently, the average home price is $374,900.
So, if you want to buy a home in this real estate housing market, the listing price may intimidate you.
Don’t worry, we are here to help. These are some tips on how to better understand the real estate market.
One of the big reasons why buyers may feel more comfortable buying a home right now is because the mortgage rate is lower than it has been in decades.
This chart reveals what the average mortgage rate has been over the past 50 years. If you look closely, you will see that the mortgage rate in 2021 has hit an all-time low in that stretch.
It has been as low as 2.8 percent in 2021 when it was as high as 8.5 percent in the year 2000. One other interesting note is that before the Housing Crisis in 2008, the rate was hovering around 6.5 percentfor comparison.
Buyers that do not have the money to pay for their house in full are looking to take advantage of this situation and minimize their interest. More importantly, they need somewhere to live, which we will get to below.
Because of the pandemic, businesses had to shut down, and a lot of companies had employees working from home rather than showing up to an office in a major city. This made people begin questioning if the city was still worth living in, and some took action on this.
San Francisco and New York had a population ratio change of negative eight to ten percent in the last year.
What does this mean? It means two of the biggest cities in America are losing a lot of people, and they are flocking to suburban areas nearby such as Napa, CA, and Hudson, NY.
Plus, people like this local realtor can specialize in selling property in a smaller area when demand is higher than ever to live outside of major cities. So, rent for city apartments may be declining while suburban house values are rising because of this.
Number of Houses
The truth is, while homes are selling at nearly record rates, the new supply available has not kept up with this demand. One study showed that the supply was as much as 2.5x lower than the normal amount.
At the end of 2020, there was only 1.9 months supply of houses to last in the market with no new houses being built. The normal rate is anywhere between four to five months supply of houses.
The pandemic obviously caused businesses to have to shut down, and construction for new houses was definitely no exception to this.
Study the Real Estate Housing Market
If house prices seem like too much money for you, studying the real estate housing market can give you a better idea of how those prices came to be, and what the best course of action for you is.
Now that you have a little bit of information, you can take the next step in this. Read more in our Business section.