Why Waiting for Home Prices to Drop Could Be a Mistake

The seller’s market for homes continues to hold strong. This is due to fewer homes on the market, supply issues affecting new home construction, and rising rent prices. Still, there are good reasons to buy now instead of waiting for the housing market to drop.

The Wait Could Be Long

If you could be certain that the market would change direction soon, putting off your home purchase would be worthwhile. But there are signs it could take a bit of time.

One big sign is that a significant reversal of the housing market would require a drastic uptick in new homes entering the market, but the inventory isn’t expected to increase for two years or more.

Mortgages Are Still More Affordable Than Rent

Another reason why waiting for prices to drop could be a mistake is that continuing to pay high rent can put you in a worse financial position. Even though mortgage rates have risen, making a payment on a home loan brings you closer to financial freedom. This is because each payment adds to the equity you own in your home.

Conversely, rent prices are usually higher than mortgage payments for similar properties. Even when factoring in the costs of homeowner’s insurance and property taxes, homeowners still tend to pay less than renters.

Contractors Are Still Facing Challenges

It’s also important to look at the construction trade. Construction companies are still dealing with labor shortages, supply chain issues, and the rising costs of materials. These factors prevent contractors from building as many new homes as they have in past years. As a result, significantly fewer new construction homes will enter the market.

The few new homes sold in the coming 12 months will be considerably higher than resale homes. The rising prices are due to the higher wages required to attract construction workers, the extended length of time it takes to build new homes, and the rising costs of wood and other building supplies.

There Are Favorable Options

If you are ready to buy a home, working with a real estate agent can help you find a better deal. They will alert you as soon as a home that matches your needs and budget hits the market.

An experienced agent will also suggest compromises to help you find a great home at a better price. For example, consider a home in the suburbs if you work remotely or don’t mind a longer commute.

Changing your criteria for buying a home can help you find a home that suits your needs and still stay within your budget.

Get the Experienced Home Buying Help You Need Today

The best way to handle real estate negotiations is to work with an experienced real estate professional. Contact the Selby Team today.