All good things must come to an end, or at least come back down to Earth…. We hope! Since the pandemic spurred the Feds into dropping interest rates across the board, we saw the housing market explode into the beast that it is now. And now after more than two years of record setting home sales many are of the mind, we are on a Bubble ready to burst. They may be in for a surprise according to a recent article.
The housing market appears to be operating without brakes as home prices continue to climb–the national median listing price saw another double-digit increase in April, climbing to $341,600. in Even with April’s 19.1% jump from a year ago mortgage rates continue to tick up, and buyers are not backing down. The Federal Reserve Bank of Dallas identified signs of a “brewing U.S. housing bubble” in a blog post March 29. Though the sharp increase in home prices in itself does not indicate a bubble, the report said, there are other fundamental factors to consider, including “shifts in disposable income, the cost of credit and access to it, supply disruptions, and rising labor and raw construction materials costs are among the economic reasons for sustained real house-price gains.”
Don’t count your chickens before they hatch though. If you were hoping for a major downturn to snag a cheaper home, think again. Most housing experts are predicting the market to remain strong for a while for several reasons.
- Millennial demand for housing is up with Gen Z right behind them
- Supply can’t keep up with demand
- Borrowers are less likely to Default on their Mortgages
Homebuyers are faced with tough choices in today’s market. Predictions indicate that home prices will continue to rise and new home construction will continue to lag behind, putting buyers in tight housing situations for the foreseeable future. So with that in mind do your home work, save your pennies and make sure that you are ready for the biggest purchase in your lifetime cause the market doesn’t look like its going to slow down anytime soon.
