The Housing Market: The Basics
Hey everyone! We are back for the month of June and with a new series! I know, I’m just as excited as you are! Especially considering the topic…the housing market and mortgages. We touched on this a few months ago in a previous blog post as a quick guide for first time home buyers but we are going to go in depth in this series. Are you ready? Let’s go!
In Part I of the series, we want to focus on some of the basics. The Housing Market covers such a broad list of terms and subjects. So, this post will provide you with two important definitions to help you navigate the conversations surrounding the market. There are generally 2 different kinds of markets when the housing market is being described most of the time – are we in a sellers’ market or buyers’ market?
In a sellers’ market, homes sell quicker than usual. This means that the market is in favor of sellers rather than buyers and the prices tend to be higher. There is a shortage of homes on the market. Buyers > Homes. Alternatively, in a buyers’ market, the opposite occurs. There is a surplus of homes and buyers tend to have more power to negotiate terms and prices. Homes > Buyers. The kind of market we are in often depends on interest rates and current economic conditions. This is something you should consider if you’re trying to buy a house and if you are trying to sell a house.
During the pandemic, interest rates were at an all time low. However, rates have risen since then (and so has everything else)! I’m sure they will continue to rise as the Fed tries to combat inflation. And, housing inventory has been low. We are in a sellers’ market right now so beware homebuyers! This could make it a little more difficult to finance a property. But it is also important to recognize that geography is a huge factor. Even though we may be in a national sellers’ market, the local housing market may actually differ depending on location. It’s worth it to research your local housing market as well.
There is a constant battle these days on whether to wait out the sellers’ market or not because we do not know how long the current market will last. It varies. Right now, we are in a market of magnified home prices and low inventory. So, it’s important to keep up with the latest news in regard to the housing market. Purchasing a home is not only a livelihood decision but it is also an investment decision. So, we’re going to help you out a little this month and provide you with some tips and information to help you navigate this housing market!
Of course, as we have discussed before, it’s important to have your finances together before considering entering the market as a buyer or seller. Over the next two weeks, we will dive into this concept. Stay tuned next week for our guest blogger, Cherie Mclaughlin. She will provide you with a mortgage guide for our self-employed readers.
As always, thank you for reading! Feel free to contact us with any questions, comments, or suggestions.
--JW