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Real Estate Market in the United States is Finally Slowing Down
During the COVID-19 global pandemic, the housing market went through its own set of turmoil. While undoubtedly billions of lives were impacted due to the pandemic, the lifespan of the impact is still ongoing.
In the earlier part of 2020, the economy suffered tremendously, which put many people's desire to buy a new home on the backburner.
However, for those who were still in the market to purchase, the number of people still searching for a house outnumbered the number of houses available.
With unemployment percentages decreasing across the nation and fewer restrictions especially in southern states, more people are going back and rethinking the idea of purchasing. Even still, the median cost of a home in the United States currently sits around $385,000. According to a report by Realtor.com, this number is up 10.3% from 2020 around this time.
Due to the higher cost of homes, a lot of people are taking a step back from wanting to make the purchase yet again. Their hope is to wait for the prices to go back down, fearing they may be overpaying for what the home is actually valued.
On the flip side, because of the delta variant of the coronavirus, there are still more companies needing to continue working remotely. It's causing more individuals to consider looking for bigger homes with multiple people under one roof needing to work from home. Some families are having to use their houses as a means for living, reprieve, an office, a daycare, and an educational facility. The question for them is whether or not their need for more space to accommodate everyone is worth the higher cost of a home.
There is also the consideration of the higher cost of living with a bigger home as well. More space means they'll have to run their utilities such as air conditioners and heaters more frequently. This along with more landscape to maintain and water will increase their overall utility bills.
According to Realtor.com's chief economist, Danielle Hale, July's slow growth in housing price is "skewed because a larger share of smaller, entry-level homes hit the market compared to a year prior, bringing the median price growth down overall."
It's no surprise that even during a global pandemic, those who are in need of finding larger, yet more affordable homes have completely reconsidered the idea of relocating altogether. Buyers are heading towards western states in the suburbs where they can get more square footage for the dollar.
The housing market has been incredibly unpredictable over the last year due to so many variables. To top it all off, mortgage rates are now higher than we've seen in the last year.
A 30-year fixed mortgage, according to a recent report, jumped from 2.93% to 3.02%. This is the highest they've been even during the initial phase of the United States' lockdown which was at 2.96%.
The real estate market is in what experts are calling the "perfect storm." High mortgage rates, increased housing prices, high demand, and an extremely low supply. Yes, they do admit that things are slowly starting to look up. But with what little we know of what to expect with these oncoming variants, there is still a lot to navigate as we enter this next phase.
But the storm doesn't end there. We also know that the cost for lumber and building supplies has gone through the roof, having tripled since this time last year. This is in part because more companies are having their employees work from home, households are looking towards saving money by renovating or building additions to their homes.
What we can expect to see in the coming months is uncertain, but experts say there is still hope in the coming future for the market.
During the COVID-19 global pandemic, the housing market went through its own set of turmoil. While undoubtedly billions of lives were impacted due to the pandemic, the lifespan of the impact is still ongoing.
In the earlier part of 2020, the economy suffered tremendously, which put many people's desire to buy a new home on the backburner.
However, for those who were still in the market to purchase, the number of people still searching for a house outnumbered the number of houses available.
With unemployment percentages decreasing across the nation and fewer restrictions especially in southern states, more people are going back and rethinking the idea of purchasing. Even still, the median cost of a home in the United States currently sits around $385,000. According to a report by Realtor.com, this number is up 10.3% from 2020 around this time.
Due to the higher cost of homes, a lot of people are taking a step back from wanting to make the purchase yet again. Their hope is to wait for the prices to go back down, fearing they may be overpaying for what the home is actually valued.
On the flip side, because of the delta variant of the coronavirus, there are still more companies needing to continue working remotely. It's causing more individuals to consider looking for bigger homes with multiple people under one roof needing to work from home. Some families are having to use their houses as a means for living, reprieve, an office, a daycare, and an educational facility. The question for them is whether or not their need for more space to accommodate everyone is worth the higher cost of a home.
There is also the consideration of the higher cost of living with a bigger home as well. More space means they'll have to run their utilities such as air conditioners and heaters more frequently. This along with more landscape to maintain and water will increase their overall utility bills.
According to Realtor.com's chief economist, Danielle Hale, July's slow growth in housing price is "skewed because a larger share of smaller, entry-level homes hit the market compared to a year prior, bringing the median price growth down overall."
It's no surprise that even during a global pandemic, those who are in need of finding larger, yet more affordable homes have completely reconsidered the idea of relocating altogether. Buyers are heading towards western states in the suburbs where they can get more square footage for the dollar.
The housing market has been incredibly unpredictable over the last year due to so many variables. To top it all off, mortgage rates are now higher than we've seen in the last year.
A 30-year fixed mortgage, according to a recent report, jumped from 2.93% to 3.02%. This is the highest they've been even during the initial phase of the United States' lockdown which was at 2.96%.
The real estate market is in what experts are calling the "perfect storm." High mortgage rates, increased housing prices, high demand, and an extremely low supply. Yes, they do admit that things are slowly starting to look up. But with what little we know of what to expect with these oncoming variants, there is still a lot to navigate as we enter this next phase.
But the storm doesn't end there. We also know that the cost for lumber and building supplies has gone through the roof, having tripled since this time last year. This is in part because more companies are having their employees work from home, households are looking towards saving money by renovating or building additions to their homes.
What we can expect to see in the coming months is uncertain, but experts say there is still hope in the coming future for the market.
