Home prices continue to be trending higher in the current real estate market with signs of staying positive. This is a good sign that those investing in real estate will see an increase in their value. We are seeing a strong real estate market and if homes are priced right, they are going to sell. Being prepared in advance with your financial situation, will put you in a better position to buy in today’s market, and taking the steps to present your home in the best way possible way will be helpful in a successful sell.
Appreciation, not to be confused with median home price ($375,700), is up 2.2% month over month, down 0.9% year over year. Median is the midpoint of the selling prices. If more lower-priced homes are selling, these numbers will fall. You can have home price increases and still have the median home price fall if more of the sales were on the lower end. Actual appreciation prices are higher, not lower, on a year-over-uear basis. In some markets, the increase has been even more dramatic. In cities such as Austin, Texas, and Boise, Idaho, home prices have increased by over 20% in the past year. The trend is not limited to major metropolitan areas. Smaller cities and suburban areas are also seeing an increase in home prices as people seek more space and a change of scenery.
Low inventory is another factor driving up home prices. Redfin Housing reports that new listings fell 23.3% year over year – the lowest level on record. There are fewer homes available for sale, which has led to increased competition among buyers, driving up prices. Existing home sales reports from the National Association of Realtors (from March) came in better than expectations. This was down 2.4% – better than the expected 4% decline.
While this is great news for sellers, it can be challenging for bnuyers, especially first-time buyers. The high prices can make it difficult for some to afford a home, and competition for available properties can be fierce. According to Redfin, 44% of home sales in March had multiple offers.
Changes in mortgage rates are also a factor in the home sales recovery. Homebuyers have been reluctant to take on the higher interest rate. Demand to purchase is still high, but with the sensitive changes of the mortgage rates, sellers are unwilling to sell and exchange their below 4% rate for above 6% on a new home. According to Freddie Mac, the 3—year, fixed-rate mortgage averaged 6.25% as of April 13. That is down from 6.28% from the previous week and up from 5% one year ago. These higher rates discourage first-time homeuyers with payments that are out of their budgets.
Even as prices soften, they may still be out of reach, so as a buyer, it’s important to keep an open mind on your house goals. Take the necessary steps to be prepared. Review your financial situation with a loan officer for a pre-approval on a mortgage loan. Knowing your budget and your maximum purchase price range will help reduce the stress in the process.
The first step to having a successful sale of your home is to find a listing agent in your area. They will know the area, field questions from prospective buyers and work closely with you to price your home. A little sweat equity can go a long way for presentation. Declutter, organize and clean to present your house’s best potential to buyers.
The pricing levels seem to be holding steady; however, we do see some sellers are adjusting their prices. These adjustments are being attributed to properties that are priced to sell or mainly for properties that were previously priced above the actual market value. Demand remains strong and pricing will be driven by demand dynamics. Home sales increase when mortgage rates come down, making affordability more widespread. The role of a loan officer will be crucial for success in navigating this constant and sensitive interest-rate cycle.