What’s Going on With the Housing Market?

Real estate has been one of the best investments year over year for the past several decades, often outpacing the stock market by several percentage points. Investing in real estate sounds like a breeze with statistics like this, right? Well, that’s where things get complicated. You see, real estate is very lucrative in the grand scheme of things, it can be a bit hit or miss for individual home buyers purchasing individual homes. Understanding the housing market is critical to making home buying decisions that will benefit you. Here are three key things to know that are going on with the housing market right now.

Mortgage Rates Are Rising

The first thing that you need to know that is going on with the housing market is that mortgage rates are rising. The Fed has been raising interest rates incrementally and looks set to continue raising the base rate for a while to come. This means that interest rates across the board for all types of loans, including mortgages, are on the rise. Your average home mortgage is now around 6% when just a handful of years ago getting a below 3% rate was not outrageously difficult.

Inventory is Low

Another crucial thing to know that is going on with the housing market right now is that inventory is very low. When there are a lot of houses for sale, the prices of homes generally decrease, since greater supply and lesser demand is favorable to buyers, not sellers. But when inventory is low, the opposite is true. Less housing inventory means prices will be higher. So not only are you being hit with rising interest rates, which can greatly impact the overall cost of your home purchase. Make sure you understand how these factors are impacting costs in the market today.

Prices Are Rising

The final thing that you need to know that is going on with the housing market right now is that prices are still rising, at least for now. Many analysts have been predicting that prices are going to come back down over the coming years, a trend which has yet to really appear. In fact, home prices are increasing faster than the year before, but leading to questions of how long such a market can last.

Understanding real estate is crucial to making smart investment decisions. Whether you buy a home or invest in properties, you need to know what’s up. Make sure that you are aware of these three trends in the current housing market.

Check out this article on the U.S. Cities with the hottest housing markets!

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