The real estate market is constantly changing, and it can be challenging to keep up with all the fluctuations. Therefore, it’s essential to understand how the current state of the market is affecting buyers and sellers. Here’s what you need to know to navigate today’s competitive real estate market.
Factors Affecting the Real Estate Market
Three main factors affect the real estate market: supply and demand, interest rates, and inflation. When there is more demand for homes than homes available, prices go up. This situation is known as a “seller’s market.” In contrast, when there are more available homes than there are buyers, prices go down. This is known as a “buyer’s market.”
Interest rates affect how much people can afford to borrow for a mortgage, so when interest rates are low, more people can afford to buy homes. Although FHA loans have more stringent standards than they used to, lenders are selling these loans right and left. Even in areas like Denver FHA loans are in demand due to an increase in first-time buyers. Still, inflation affects how much money people have in their pockets overall, so when inflation increases, people have less money to spend on housing.
It’s a Seller’s Market
Currently, the real estate market favors sellers because there is more demand than supply. This means that prices are going up, and it’s becoming increasingly difficult to find affordable housing. Also, interest rates are relatively low right now, which makes buying a home affordable for many people. As a seller, you might get multiple offers resulting in a bidding war. That said, even in the current seller’s market, savvy buyers want a home that’s move-in ready with an up-to-date kitchen and bathroom.
Sellers know they need to update the kitchen, but what they don’t always realize is that today’s buyers are also searching for a spalike bathroom. The reality is that many prospective buyers expect to see a quality bathroom with a tub and shower or at least a shower conversion. Because of this, companies like Beautiful Bath Pro are doing a lot of remodeling.
It’s Still a Good Time to Buy
Although the current state of the real estate market is one that favors sellers, there are still many benefits to buyers. Mortgage interest rates are at historic lows, making it more affordable to purchase a home. Also, buying any piece of real estate is an investment. People hoping to buy should keep in mind that the inflation rate is at an all-time high, which means it may be even more difficult to purchase a home in the future.
What to Expect When Shopping for a Home
In a seller’s market, buyers need to be prepared to compete with other buyers for the best properties. They should also be aware of rising prices and interest rates, which could affect their ability to afford a home. That said, buying a home in the current market is probably still a good idea. Property values tend to increase over time, which means that homeowners usually earn equity.
What to Do If you Find Yourself Struggling to Buy a Home
The current state of the real estate market makes it hard to find a home. If you find yourself struggling to find an affordable home, there are a few things you can do: First, get pre-approved for a loan ahead of time, so your financing is in place when you need it. Next, be patient and keep looking. Many buyers are turning to smaller cities and towns to find affordable homes. Even if you have your heart set on living in a booming metropolis, the perfect house will come along eventually. Stay true to your planned budget, but you may have to be willing to compromise on some of your wants and needs.
The Race to Find a Home
There’s no question that the real estate market is booming, with buyers routinely offering above a home’s asking price. Many people are anxious to buy a house before prices start to go up again, while others are waiting on the sidelines, unsure of what to do. Millennials, in particular, are scrambling to purchase homes, and there isn’t enough inventory.
Clearly, it’s a seller’s market. However, the real estate market is constantly in flux because changes in the economy can have a significant impact on housing prices. If inflation continues to occur, then it will become even harder for people to afford homes since they will have less money overall. So, whether you’re a buyer or a seller, it’s important to keep an eye on a situation that could change in the near future.
