For anyone looking to buy a house, it’s truly been a rollercoaster of a ride as of late. Mortgage rates are high and the demand for housing is the highest it’s been in recent years. With that being said, Reed Pirain notes that it’s important to understand housing market info and trends to be a smarter purchaser of property.
Trends to Understand in Real Estate
Just as staying in the loop was crucial back in high school, staying informed about current trends and what’s en vogue holds significant weight. Let’s dive into the dynamic shifts in the housing market.
- Home Sales
Right now, home sales have slowed down thanks to a 30-year fixed mortgage rate. There has been a 19% drop in sales in the last year. For example, looking at a bigger city such as Pittsburgh, the sale-to-list price dropped slightly.
Despite this, the inventory of units for sale has not increased, meaning that the market remains undersupplied and demand for housing is still higher than what’s available. The Housing Authority City of Pittsburgh (HACP) has determined that new housing projects need to price at least 10% of the units affordably, but is this enough?
- Home Prices
Housing prices have been rising (0.8% as of now), and are projected to rise 0.9% over the next year. This is mainly due to the limited supply of housing, how many millennials are now coming of age, and the fact that these millenials can now afford to buy their first house.
In a list of top 10 cities for millennials to move to, Pittsburgh was placed as number nine. While not as popular as Denver, Colorado (which was the top choice), it still has a competitive housing market. Pittsburgh homes sell at about 3% above the list price and stay on the market for about a month.
Home prices are expected to remain high, but sales and refinance activity are looking to stay flat. Because of this, mortgages shouldn’t change much. Right now, general country mortgage rates are hovering at 6.5%.
In Pittsburgh, where a demand in housing is high (especially for younger people), the mortgage rates are looking at 7.3% for a 30-year fixed mortgage and 6.5% for a 15-year fixed mortgage. This is about on par with the rest of the country, if not higher.
Should I Buy a House Now
The million-dollar question is whether it’s time to buy a house. Given that mortgage rates are stable yet high, and the price of houses are still on the more expensive side, experts are advising to wait it out. According to the Fannie Mae Home Purchase Sentiment Index, about 80% of consumers believe it’s a “bad” time to buy a house.
With all that being said though, some are saying that by the end of 2023, bigger metropolitan areas will have more affordable housing available. If purchasing a house is a must for this year, ask questions:
- About credit scores: the best mortgages will be available to people who have high credit scores (740 or above)
- About Down payment: saving to pay the down payment is important because it means that less will be borrowed
Whether buying a house is in one’s future or not, do research, talk to a real estate agent, and read up on other sources for buying a house.