If you’re trying to figure out whether or not you can afford something, you typically only have to consider its price. Buying a home, however, is a bit more complicated. When you buy a house, there are variables to consider beyond the list price. You have to take things like insurance and taxes into consideration as well. That’s why, despite the fact that home prices have been rising lately, buying is still a good deal in many markets. How is that possible? Well, it’s mostly due to mortgage rates. According to a recently released analysis from the National Association of Realtors’ consumer website, historically low interest rates have helped keep the median monthly mortgage payment relatively flat over the last year. In fact, the monthly cost to purchase a median priced home increased just 0.2 percent year-over-year, despite double-digit home price growth during the same period. Danielle Hale, the website’s chief economist, says the news is encouraging but conditions can change. “With interest rates expected to rise over the coming months, buyers may need to act sooner than later to take advantage of today’s affordability or be prepared to adjust their target purchase price,” Hale said. (source)
Archive for March 2021
Vaccine Distribution Could Help The Housing Market
Last year was a surprisingly good year for the housing market. Despite the coronavirus and its economic impact, residential real estate was hot. Buyer demand was high and homes for sale sold quickly. Still, there were plenty of people who delayed their plans to buy or sell a home because of the uncertainty caused by the pandemic. Whether or not they return to the market this year will play a big role in determining what conditions look like for prospective home buyers and sellers. According to one new survey, it might come down to how quickly the coronavirus vaccine is distributed. For example, survey results show 52 percent of respondents said they’d feel comfortable moving to a new home right now. However, that number rises to 70 percent when asked if they’d feel comfortable after widespread vaccine distribution. Similarly, among homeowners who said the vaccine would factor into whether they decided to sell their home or not, almost 80 percent said it’d make them more likely to move. In short, it looks like there’s a significant number of Americans who’ll be ready to make a move once the vaccine has been distributed. How quickly that happens will have an effect on everything from inventory to affordability. (source)
Contract Signings Hit All-Time High For January
When a home seller accepts an offer and a contract to buy is signed, that home’s sale is considered pending until it closes weeks later. Because of the gap between contract signings and closings, pending sales can be a good indicator of future home sales. That’s why the National Association of Realtors tracks them each month. In January, their Pending Home Sales Index hit an all-time high for the month, despite dropping almost 3 percent from December. Contract signings are now up 13 percent from last year at the same time. Lawrence Yun, NAR’s chief economist, says they’d be even higher if there were more homes for sale. “Pending home sales fell in January because there are simply not enough homes to match the demand on the market,” Yun said. “That said, there has been an increase in permits and requests to build new homes.” Regionally, the West and Northeast saw significant declines month-over-month, while the South and Midwest were relatively flat from one month earlier. (source)
