-
Cancelation of Real Estate Purchase Contracts
The housing market forecast looks gloomy. With the average home prices up 100% since 2019 with rates at 7.5% and inflation at historic highs, homebuyers are perplexed as to buying a house now or later. Besides all the above, homeowners insurance is up as 500% and property taxes are skyrocketing.
Watch the attached video.
-
2 Replies
-
You were right to bring these up. The current housing market is tough for many potential buyers. Here are the points you made and what they mean:
Housing prices going up:
- Prices have doubled since 2019, which has made it much harder to afford them.
- This is not sustainable over time.
Mortgage rates being high:
- They’re at 7.5%, the highest they’ve been in a long time.
- So monthly payments are much more expensive.
- This reduces how much people can spend on houses.
Inflation being high:
- It’s eating away at what people can buy.
- Saving for a down payment is now even harder.
Homeowners insurance costs going up:
- They have increased by 500%, greatly contributing to owning a home.
- People don’t think about that when budgeting.
Property taxes increasing:
- These keep adding to what homeowners have to pay every year.
- It can hurt in places where homes are gaining value quickly.
What This Means For Home Buyers:
Affordability Crisis:
- Prices and rates have put most homes out of reach for average people.
- Compared with what we make, monthly payments on a typical house are higher than they’ve ever been
Should I wait or should I buy?:
- Buyers fear waiting too long and finding worse conditions.
- Or acting now only to see prices drop later.
- You might miss out, versus you might overpay.
The Market Is Changing Up:
- Some areas where values rose fastest are starting to cool off.
- More stuff is available than before in many parts of town.
Should I think long-term or short-term?:
- Short-term market changes aren’t a big deal if someone plans to live somewhere forever.
- But if they want in/out quickly, that’s riskier.
- Long-term buyers vs short-term buyers/investors.
Advice For Potential Home Buyers:
Assess Your Situation First Thing:
- Job stability, savings, plans.
- Rent vs buy in your area.
Don’t Overextend Yourself: Use the old 28-30% housing cost-to-income ratio. Remember, increased insurance and taxes, too.
Timing Is Key: Some experts think prices in certain cities might soon fall back down. That said, market timing is mostly luck-based.
Look At Everything: Check out what first-timer home programs you might qualify for. Consider fixer uppers/less competitive markets.
Be Ready For A Bargain: Get your financial life together so you can act on it immediately when the right place arises. This means having a good credit score and being pre-approved for a loan.
Think Long Term: If it will be your forever house, don’t worry too much about what happens today or tomorrow.
Also, consider living in them instead of treating homes like investments only.
Stay Sharp:
- Keep an eye on what houses nearby are selling for/how fast.
- Interest rates could change at any time.
- New laws could hit housing anytime, too.
- Stay woke.
- It’s worth remembering that all real estate is local.
- National trends matter, but every city and neighborhood has its happenings.
- Make sure to research where exactly you want to buy.
- Talk to people who work in those areas before deciding.
It’s hard right now, but this game will reward you if you come in correctly. It always does. Make sure whatever you’re doing makes sense based on who you are and what you want. Not because somebody told you they knew where the market was headed.
-
Mortgage rates are coming down but home sales are not increasing. The economy is in very bad shape. Home sales are dropping month after month
Home builders like Lennar Homes and DR Horton are in a panic mode and are lowering prices up to 30% and offering huge incentives. Stay tuned folks. GCA FORUMS NEWS will update you more on this horrific housing market.