‘Prospective buyers will face new challenges’: Home values rise at breakneck pace, however some economists say it may not last.
The numbers: Home prices still increase at an incredibly fast pace across the country, based on two separate indices released Wednesday, adding to the financial pressures house buyers face amid rising mortgage rates.
Prices rose from month to month in 19 of the 20 large cities tracked by Case-Shiller, with Cleveland being the only city to determine prices decrease. When compared with January 2020, prices were up in all 20 cities the report tracks.
First-time home buyers who have been already stretching their financial predicament will have to make bigger compromises on size and location or resign to renting for an additional year,” “However, those who find themselves flexible should look to the condo market where there’s still a little less competition.
Looking ahead, Biden’s structure plan aims to incentivize zoning for multifamily homes, which could increase the supply of affordable homes and provide much more people a path to homeownership, but there is no guarantee the incentives would be enough for local governments to change their zoning practices.”
The pandemic motivated a rush into the housing market. Confined homeowners eagerly searched for larger homes with more outdoor space further out in the suburbs and rural areas, even though the rise of remote work also led to an excuse for more room. Plus, millennials are reaching their prime home-buying years.
These buyers have come across little supply of homes for sale, creating a tremendously very competitive and stressful market. Until recently, that’s caused home values to rise quickly, but that could soon change.
At the same time, interest in homes has become strong as individuals have left tiny apartments and beginner homes seeking additional square footage and bigger backyards as the pandemic drags on. People who had been intending to buy in the next few years moved up their timeframes as home loan interest rates dropped to record lows. And millennials hitting their peak home-buying years flooded the marketplace.
“We expect time on market and value gains to moderate as we approach spring and more sellers put homes on the market, but potential buyers will deal with new challenges later in the year,
Substantial price movements in commodities aren’t determined by “technical breakouts or breakdowns”. Rather, they’re based on supply and demand fundamentals.
There may also be a surge of foreclosed homes hitting the market in the coming months. The reason being that moratoriums on house foreclosures are slated to be lifted this summer. The result could be millions of homes going on the market.