To buy or not to buy? Is now the best time to buy a home in the US?
Buying a home isn’t an overnight decision, and the US housing market doesn’t exactly make it easy to buy a home. Read on to learn if now is the best time to buy.
The US housing market, like many housing markets worldwide, isn’t exactly in the best shape. Many individual state markets are stuck in what’s known as a seller’s market, meaning selling a house is more favorable than buying a home due to the price fluctuations.
Reports stated that in 2021 alone, house prices increased by nearly 19%. That’s on top of house prices that were already expensive in some states. Still, buying a house is a necessity for some people in 2022, but will the market recover? If not, how can homeowners save vital dollars? Let’s explore.
The housing market price increases
The housing market price increases aren’t unique to the US. Across the globe, housing markets are on an inflation spike, much like the global economy is. The rising economic inflation rates are, in fact, one of the reasons why the housing market is continuing on an upward price trajectory rather than downwards.
The 18.7% increase in 2021 was the highest in 34 years and was a massive leap from the 2020 price increase of 10.4%. The south and the southeast experienced the highest increases of around 25%, much higher than the 18.8% average across America.
Phoenix, Tampa, and Miami reported the highest gains and are yet to recover. There’s also the issue that the supply of homes is tight, and as a result, it’s harder for buyers to find a home that’s exactly what they need.
The homes themselves aren’t the only prices to increase – closing costs and legal fees rose in 2021 in response to the pandemic and economic inflation rates. The same goes for the rental market – more people are opting to rent than ever before due to the inability to afford to buy a home, meaning there is a shockingly low supply of homes to rent.
To buy or not to buy?
The question is, to buy or not to buy? The statistics shown so far tell a story of the last 12 months of house price increases, but what about the next 12 months? A poll that involved 30 experts within the housing market predicted that house prices should increase by 10.4% in 2022. Plus, there’s still the issue of a supply issue – there aren’t enough homes on the market for people to buy.
The location and circumstances also factor into the decision. People living in areas like Tampa and Miami might feel as though now definitely isn’t the best time to move home, but the circumstances might force them to do so. Incidentally, which state you live in impacts homeowners insurance costs too, with Florida 18% higher than average.
There is, however, a construction boom underway in the US. Still, the lingering supply chain issues from the pandemic and the backlog of people wanting to buy a home could mean that it would be years until the housing market levels out.
How to save some dollars
If the answer to the question to buy or not to buy is a buy for you, it’s wise to know how to save some dollars along the way. Simple tips like moving home during the off-peak season – typically the winter season – can save those all-important dollars. You’ll also find that it’s cheaper to hire removals companies during the off-peak seasons.
Here’s a list of other ways that you can save some dollars:
- Use online moving calculators
- Compared new builds Vs old houses
- Try asking for deals
- Compare utility providers before moving.
Will the housing market improve?
Expert predictions are that the housing market will get worse before getting better, but the prices won’t increase as much as they did in 2021. Zillow, for example, predicts that house prices will increase by 14.9% between March 2022 and March 2023.
The other factor at play is the sharp increases in mortgage rates. Having the deposit to buy a home isn’t enough – acquiring a mortgage or a homeowners loan is becoming increasingly difficult.
That sends us back to the question of whether to buy or not – it’s all down to personal circumstances and whether you can afford to wait to buy a home. If we look at the statistics, it would be better to wait to move.
The US housing market is in turmoil. There is a near-record low in supply problems, the economic inflation rates, and the increasing associated costs of buying a home for buyers to contend with if they want to find their dream home. Is now the best time to buy a home in the US for you?