House prices have been on fire over the past year and continue to soar in spite of a certain “C” word. In fact, the recent pandemic is partly why prices continue to rise as a housing shortage has encouraged more and more sellers to take their homes off the market.
There is also the fact that many potential buyers are unable to get a loan and pre-approval is proving increasingly hard for those experiencing difficult times.
Now, let’s take a look at why prices continue to soar and what you can do about it…
Why Are Home Prices Continuing To Rise
Many workers are now working from home and working remote at the very least. This means that relocation is now a real and viable option for some, while especially low interest rates have made the mortgage market more attractive.
Home builder confidence is also peaking and although expected to slow down, construction continues to rise in lieu of it being a sellers market. That being said, there are limiting factors at play which slow down construction and keep demand high such as skills shortage and the rising cost of materials, not to mention the slow down caused by the coronavirus.
But that’s just part of the story…
Buyer demand is surging. Recent studies show that certain segments of the workforce are largely unaffected by the pandemic. For this reason, a pent up demand is building and experts fully expect this to continue for at least another two years. What’s more, housing supply is lagging behind and affordability challenges mean this is also certain to continue.
In a recent interview on Forbes, a respected economist explained how a higher barrier for entry for first time buyers along with rising prices will spur the market further. Meanwhile, a lack of existing home equity will make it more challenging for future buyers to raise money for their mortgage down payment.
What Can You Do About the Rising Cost of House Prices?
There’s simply no better way to be competitive in a sellers market than to be prepared. You can do this by researching the current market and knowing everything about due dates and disclosures. It’s also vital to have a pre-approval letter ready to go and request information about potential properties or viewings from buying agents.
Instead of waiting for the right time, it’s also worth mentioning how many buyers miss out on their dream home because they overthink and wait too long. With this in mind, taking an offensive mindset to a sellers market can really help you stand out and find opportunities while most other buyers are sitting around and waiting for things to change.
It’s a sellers market and this will certainly continue into the near future. But there is still opportunity and always an opportunity for buyers to find their dream home. And while we do know that mortgage rates will eventually tick up and more homes will come on the market, as with every other market, the number of buyers will outweigh and prospective sellers will look back at this period as a time of great opportunity.
To help you be prepared to act quickly when your next home becomes available, contact a salary-based loan officer at City Creek Mortgage today.