As the effects of the pandemic continue to ripple across the housing market, there’s been a lot of speculation about whether we’re due for a housing market crash. However, recent data has revealed a surprising trend: home prices are shooting up again. In this blog post, we’ll delve into the latest updates on the housing market and explore what this could mean for homebuyers and sellers alike.
Introduction
The housing market has been on a rollercoaster ride for the past couple of years, and it seems like the ride is far from over. After the COVID-19 pandemic has impacted all sectors of our economy, the real estate market faced significant challenges too. However, it appears that home prices are bouncing back up again, leaving potential buyers wondering whether the market is heading towards another housing market crash.
Current Home Prices Trend
The national housing market has rebounded quite strongly from the pandemic’s initial impact, with home prices skyrocketing across the United States. According to the National Association of Realtors, the median existing-home price for all housing types in June was $363,300, up 23.4% from June 2020 ($294,400), marking 112 straight months of year-over-year price gains.
The Real Reason Behind The Surprising Price Rise
In the past few years, the housing market has seen lower inventory than usual, resulting in a supply struggle for many buyers. Along with that, the pandemic made potential sellers reluctant to open their homes to strangers, lowering the number of homes on the market. This decrease in inventory, combined with high demand, had made home prices climb and is a clear indicator of the seller’s market in the housing industry.
Impact of COVID-19 Mishaps on Housing Market
Despite the pandemic’s significant economic impact, the housing market hasn’t slowed down as experts predicted. Interest rates remain low, and the Federal Reserve has pledged to maintain them to provide stability to the economy. The pandemic-driven low-interest rates enticed many homebuyers, incentivizing them to buy homes as quickly as possible, which weakened the already low inventory.
Affordability of Homes
With the rise of home prices, affordability has become a massive issue for potential homeowners. It’s not only first-time homeowners who are struggling with affordability, but long-term homeowners who are trying to refinance their homes are feeling the pressure of high house prices. Despite the rise in home prices, housing affordability still remains within the sets of the majority of the population, thanks to the affordable mortgage rates that were under 3% at the start of the pandemic.
How To Support The Housing Market
Investors and potential homebuyers might be hesitant to invest in this seemingly shaky housing market, but holding back from investing might not be the best option. Supporting the housing market in any way possible, such as sharing informative videos and reading relevant articles, can help the market’s growth.
Conclusion
To sum up, the housing market has been facing ups and downs for a few years now, but the recent surge in home prices has taken it to unprecedented heights. The increased demand for homes, thanks to the low interest rates and affordable mortgage rates, is one key driver of this sudden surge. However, it is crucial to remember that any investment carries risks, and a decline in value is always a possibility. Remember, the content of the material provided is for informational purposes only and not meant to provide any tax, legal, or accounting advice.
