Dec 03 2024 3 mins
Key Factors in the Housing Market
- Builders are struggling to keep up with demand.
- Rising costs are contributing to the delay: lumber prices, labor costs, and permit fees.
- Skilled tradespeople are in high demand, leading to wages of $70-80 per hour, which is affecting home prices.
Interest Rates and Housing Prices
- 8% mortgage rates are not expected to cause a crash in the housing market, despite economic struggles.
- Builders cannot meet the demand for new homes, and homes continue to be removed from the market due to age or remodeling.
- The 8% mortgage rate has already been factored into the market; people have adjusted their budgets accordingly.
- Interest rates have been higher in the past, with 12-18% rates in the 80s, so current rates are considered normal.
Impact of Low Inventory and High Mortgage Rates
- There’s too few homes available, and it will only get worse.
- Many homeowners have significant equity or low-interest rates, so they are not desperate to sell.
- The lack of inventory and the normalization of 8% rates means the housing market won't crash in the near future.
Advice for Potential Homebuyers
- Focus on purchasing the cheapest house within your budget.
- Consider compromising on some features of your dream home.
- Renting may leave you vulnerable to rising rent prices or potential lease cancellations.
- Home improvements like painting or replacing carpets are affordable and can enhance a home.
Let Us Know Your Thoughts
- Share your opinions and what you're seeing in your local market in the comments.