Hurry Up, Home Price Will Go Up Soon!

If you're considering selling or purchasing a home, staying informed about the housing market is likely high on your priority list. However, navigating the current landscape can be confusing, with many factors influencing decisions. Here's a short overview to help you grasp the current trends:

1. Rising Costs in Residential Development:

• The price of raw land for residential projects is steadily climbing.

• Concurrently, building costs, encompassing labor, materials, and financing, are rising.

Impact: These factors collectively contribute to a slowdown in new single-family home constructions. Consequently, prices for new builds surge, thereby influencing higher pricing for existing homes as well.

2. Implications for Apartment Construction:

• Builders of apartment complexes are scrambling with escalated building expenses.

• This surge has led to numerous new projects being put on hold.

Impact: The scarcity of apartments is anticipated to drive rental costs upwards imminently. Consequently, rental home investors may also begin adjusting rates upward.

3. Declining Mortgage Rates:

• Mortgage rates are currently downward, which traditionally raises homebuyers' affordability.

Impact: Lower mortgage rates will likely incentivize more prospective buyers to re-enter the market, intensifying demand and consequently driving higher home prices.

4. Fluctuating Housing Inventory:

• While overall housing inventory has increased, certain regions are experiencing contrasting dynamics.

• Multiple offers are commonplace in some locales, often resulting in sales above the listed price.

Impact: This variance underscores localized demand-supply imbalances, with high-demand areas witnessing competitive bidding environments.

5. Homeowner Dilemma Amidst Declining Rates:

• Despite the decline in mortgage rates, they have yet to reach the thresholds of existing homeowners, many of whom secured loans at rates of 4% or less.

• This predicament often discourages homeowners from selling, further constraining the supply of available homes for sale.

Impact: Homeowners' reluctance to sell contributes to the scarcity, pushing home prices upwards due to limited availability.

In conclusion, as much as we would like to see housing affordability grow, allowing more people to afford to buy their forever homes, all indications point in the other direction, with no real relief in sight.