Finding Home: Navigating the Housing Market - Good Guys Moving

Finding Home: Navigating the Housing Market

Navigating today’s housing market can be a tall task — especially for first-time homebuyers. Millennials are finally reaching the age range when most folks purchase their first house, but a variety of factors are keeping them from finding their starter home. So, let’s break down today’s housing market, why prices are so high, and when experts predict prices to fall.

RISING PRICES

There are several legitimate answers to this question and the foremost concern is price. The national median home price has sky-rocketed from about $260,000 in 2016 to more than $380,000 in 2021.

INCREASED DEMAND

Demand is also a contributing factor. Despite the rising cost of housing, mortgage rates are at an all-time low. That certainly gives Americans a reason to find a new place to call home. Between 1981 and 2020, mortgage rates dropped from 16.64% to just 3.11%.

LESS AVAILABILITY

In 2016, the average home was listed for 86 days. Today, a house sells in just 39 days. The number of available homes is also down significantly, which is creating even more of a headache. In 2016, 1.6 million homes were on the market, whereas today there are less than 650,000!

WAGES FALL BEHIND GROWTH

Americans’ average wages have risen by about 2% to 3% each year, according to the U.S. Labor Department. But home prices have risen at a rate of about 7% each year in the span.

WEALTHY INVESTORS

When you’re having to compete with buyers who pay over asking price in cash, it can be tough to win a bid. That’s exactly what prospective homebuyers are dealing with today. Wealthy investors will swoop in with exorbitant offers to ensure a sale.

WHEN WILL HOUSING COSTS GO DOWN?

The sad truth about the cost of housing is that prices may not fall for the foreseeable future. Prices aren’t expected to drop nationally, however some individual housing markets are seeing declining rates of growth. That’s because in many places, new construction is beginning to meet the demand for new homes. There is some good news though. New construction has been recovering well since the Housing Market Bubble burst in 2008.