Were you considering buying a house, but increasing home prices and higher interest rates have scared you away? Well, a lot of buyers such as yourself are thinking quite the same thing, they should just wait! 

And I am inclined to agree with that.

Increasing Home Prices.

In 2021, home prices went up 16.9% from 2020, which was the highest increase since 1999, according to the National Association of REALTORs®.  In addition, Zillow predicts that by January 2023 home prices will have increased by 17.3%. Let us look at an example of how these predictions affect your buying power year over year.  

For example, if were looking to buy a home in 2020 for $300,000 and the price increased by 16.9% that same house would cost $350,700. Ouch! An increase in house cost would scare off any potential buyer that sees these prices increase so dramatically and so exponentially. That is an incredibly hefty sum of money for one single year! According to SFGATE.com, the national appreciation values average around 3.5 to 3.8 percent per year. That is a lot to digest and take on financially when people are still reeling from the budgetary impact of COVID-19 the year prior. 

The main reason for these astronomical price hikes was all because of low inventory caused by the global pandemic.

Higher Interest Rates.

If you have been following the financial market or looking to buy a house, you will have noticed that the record low interest rate of 2021 is no longer a thing! According to The Mortgage Reports.com by the end of 2022, experts anticipate that the 30-year fixed mortgage rate could land between 4.8% and 7.0 percent. For the 15-year fixed mortgage rate, their predictions fall between 3.9% and 6.0 percent. You add that to steady increasing prices and right now may not be the best time for you to buy. That $300,000 mortgage that you could afford in 2021 at record low interest rates has just doubled only one year later. Which now means that you may not be able to afford the house for which you had hoped. So, it is best to wait.

Inflation.

With inflation in affect, the price of everything you buy has either doubled or tripled since the beginning of 2022.  With all these factors in play right now truly is not the best time to purchase a home. 

Of course everyone’s situations will be different, but these are some of the main reasons a lot of buyers are sitting on the sidelines, waiting for things to calm down in the housing market.  

P.S. Please do not think that there will be a housing bubble like 2008! 😂😂

Please be sure to read my next blog on Why Right Now is the Best Time to Buy a House.