Expert: First-time homebuyers should be patient in COVID-era housing market

New home sales fall in April fourth month Continuously approaching levels of the COVID-19 pandemic.

Housing experts say first-home buyers could benefit.process just now need a little patience.

“It’s entirely possible that prices will level off and not change much over the next few years,” said Greg McBride, chief financial analyst at Bankrate.com.

“This will benefit first-home buyers by allowing their incomes to ‘catch up’ with the cost of buying a home to a certain extent, but this will unfold over two to four years, not the next two to four months.”

America has incurred two-year surge House prices during the COVID-19 pandemic.

Around that time, the Dow hovered between 13,000 and 34,000 in less than 24 months as home prices were weighed down by rising interest rates, a shortage of prime home inventory, inflation impacting the cost of materials, and “stock market volatility.”

Rod Smyth, chairman of global asset manager RiverFront Investment Group, believes that prices are generally near their peaks.

“However, with strong supply and demand conditions, we believe most markets are more likely to be ‘rusted’ than ‘depressed,'” Smith said. “The rust refers to the nominal price [not adjusted for inflation] There may be a decline or a few years of stagnation around current levels. “

According to a YouGov.com poll of 1,000 adults, Only 6% of homeowners Said their house depreciated in value last year.

During this period, that means affordability could be a challenge for first-time homebuyers, CBS MarketWatch said.

The median home sale price is $428,700 Q1 2022an increase of 30% from $329,000 in the first quarter of 2020.

Mortgage rates also jumped to a 30-year fixed rate of 5.25% from 2.75% last fall.

Redfin estimates that 8.2% of homes are currently valued at $1 million or more, which equates to 6 million properties.

This is significantly higher than the 3.5 million million-dollar homes in 2020, or 4.8% of the national housing stock.

“Sellers have been putting homes on the market and asking for high prices,” McBride said. “In a neighborhood where a home sold for $600,000 a year ago, a seller might now be asking $800,000. Of course, they may need to lower the price a bit and It ended up selling for $725,000, but that’s still well above the $600,000 it would have sold a year ago.”

As Greg Handler, head of mortgage and consumer credit at Occidental Asset Management, told MarketWatch: “Can you really see a correction or an overcorrection? I think there’s clearly some risk in that.”

“Fixed mortgage rates have recently stabilized in the 5.25% to 5.50% range after rising about 1.25 percentage points since the end of March,” said Bob Griffith, general manager of home services Mortgage at Hausera Philadelphia-based real estate and mortgage brokerage.

“Last week, we saw signs that house prices may be stabilizing, as the inventory of homes for sale increases and the proportion of homes below list price increases. These developments, if they continue, will help new buyers enter the market.”

More positive data: More than half (58%) of Americans own a home, nearly 30% report owning a home outright, YouGov’s The poll also found that.

The five-year U.S. Census Bureau estimates, Published in 2020found a slightly higher percentage of owner-occupied units – 38 per cent – ​​fully owned their own home.

What does this mean for potential home buyers under the age of 40?

“Rising home prices and record low inventory of affordable housing for sale are also hindering homeownership,” according to report to Freddie Mac From last year, about millennial homeownership.

“On the other hand, as more millennials reach age 40, their family formation rate will accelerate due to higher marriage rates and more stable incomes.”

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