In July, house prices rose by almost 18%. Should buyers back down?

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Today’s housing market is hard to hack. Not only are stocks extremely limited, but home values ​​have skyrocketed nationally, making it difficult for today’s buyers to find an affordable place to call their own.

According to the National Association of Realtors, in July, the average price of a home sold rose to $ 359,900. This is 17.8% more than in July 2020.

To be fair, activity in the upper segment of the real estate market was higher than in the lower segment, so the more expensive homes skew this average upward. But, nevertheless, due to the lack of housing stock, buyers may have limited options these days to find homes that fit their budget.

If you’re looking for a new home, you might be wondering if you should push your buying plans or postpone your search. Here’s what you need to know.

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Does it make sense to buy today?

As of the end of July, the stock of the housing stock was 2.6 months. For context, it usually takes 4 to 5 months of inventory for there to be enough homes on the market to meet customer demand. Since this is not the case today, many homes on the market are prone to losing bidding warwhen two or more buyers visit the same property in the hopes of getting an accepted offer.

Trade wars are good for sellers because they tend to drive up home prices. But they can also force individual buyers to pay more. And they can lead to a general rise in prices. Let’s say a handful of houses in a given area of ​​land are bidding and selling at higher prices than they were originally billed. This can inspire prospective sellers to list at higher prices, triggering a cycle that is harmful and restricts buyers.

It is for this reason that you, as a buyer, can opt out of the housing market today and wait for the product to be added. As more homes come in, there will be less competition. This means fewer bidding wars and potentially lower prices.

Now, you may be concerned that by postponing your plans to buy a home, you will lose today’s low prices. mortgage rates… But the reality is that the mortgage rates are likely to remain low not only until the end of the year, but also in 2022 and possibly beyond. So if you sit back and wait for the inventory to open, you can block the affordable mortgage and also paying a lot less for a home to start with.

Postponing home searches can also make the process less stressful. Homes these days spend an average of only 17 days on the market before being sold out. This forces shoppers to act quickly on what could be the biggest purchase of their life. If you decide to postpone your buying plans, you may find that not only can you find a home that fits your budget more comfortably, but you can do so without the stress that you are likely to face right now.

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