Property Factors

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Today’s Biggest Home-Buying Concerns

Are you a buyer or seller looking to purchase a home?

Fannie Mae published their House Purchase Sentiment index (HPSI) last month. The survey found 77% of respondents believed it was a good time to sell, but it also confirmed what many are feeling: an increasing number Americans think it’s a bad time to purchase a home. 64% of respondents said it was a bad time to buy, up from 56% and 38% respectively last July and last month.

1. For home-buyers, affordability is still a major concern

Let’s take a closer look at the market conditions that affect home affordability.

The mortgage payment is determined based on the purchase price and the interest rate for the loan. Two reasons have led to an increase in monthly mortgage payments for buyers:

  1. The mortgage rates have risen from 2.65% in January to 2.9%.
  2. In the past 12 months, home prices have risen by 15.4%

These rising factors may make a home more expensive today, but that doesn’t necessarily mean it’s un affordable.

Three weeks ago, ATTOM Data published their second quarter 2021 U.S. The Home Affordability Report explained that the cost of a typical home, as a percentage of the average national income, has increased from 22.2% to 25.2% during the second quarter 2020.

Alternative 1: I’ll Rent instead.

Renting may be a better choice for some people. The monthly cost of renting a house is rising. The July National Rent Report is based on Apartment Listing:

“…Rental prices have increased by an astonishing 9.2% so far in 2021. This is a significant increase in rents compared to previous years, which typically grew by 2 to 3% from January to June. Rents have risen well beyond what we expected if the pandemic had not interrupted the market em>

Rent will likely continue to rise if you rent. This could mean that you may end up spending more of your income on rent, making it harder to save for a house.

Alternative 2: Buying Now: I’ll just wait.

Others might wait another year to buy a house and hope that the cost of buying it will drop. Let’s take a look at this possibility.

As we know, a monthly mortgage payment will be determined by the value of the home and the interest rate. To decrease your monthly payments over the next year, you would need one of these elements. Experts predict the exact opposite

  • According to the Mortgage Bankers Association, mortgage rates will reach 4.2% by next year.
  • The Home Price Expectation Survey (HPES), which includes over 100 economists and investment strategists as well as housing market analysts, predicts that home prices will rise by 5.12% in 2022.

Bottom Line

Although you might have missed the best time to purchase a home, it may still be a good idea to wait. Mark Fleming is the Chief Economist at First American. has the best.

“Affordability will likely to worsen prior to it improving, so try to purchase it now, if possible.”

This post was written by Dayana Susterman Dotoli. Dayana is the head real estate agent for the Tiffany House In Ft. Lauderdale Beach. Dayana has assisted over 150 individuals with buying, selling, and leasing at Tiffany House. The Tiffany House Residences is a 12 story tower,  offers 129 residences, including 1, 2 and 3-bedroom condominiums and townhomes, with exclusive, resort-style amenities and views of the Intracoastal Waterway and the Atlantic Ocean.

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