Home Prices Keep Rising, should I still Buy?
If you put off moving because you’re worried home prices might drop, make no mistake, they’re not going down. In fact, it’s just the opposite. National data from several sources show a number of trends that we will discuss and offer a few reasons why buying now, and not waiting, is a better strategy for buyers than waiting for home prices to drop.
In the first half of 2022, home prices rose significantly, however those increases were dramatic and unsustainable. In the second half of the year, prices went through a correction and started dipping a bit. But those slight declines were shallow and short-lived. Media really focused on these drops in headlines which created a lot of fear and uncertainty among would be home buyers. But here’s what hasn’t been covered fully. So far in 2023, prices are going up once more, but this time at a more normal pace. After price gains that were too high and then the corrections that followed in 2022, the fact that all three reports show more normal or typical price appreciation this year is good news for the housing market.
Orphe Divounguy, Senior Economist at Zillow, explained that the changing home prices over the past 12 months this way:
“The U.S. housing market has surged over the past year after a temporary hiccup from July 2022-January 2023. . . . That downturn has proven to be short-lived as housing has rebounded impressively so far in 2023. . .”
Now to look ahead, appreciation typically starts to ease up this time of year. As that happens, there’s some risk the media will confuse slowing price growth (deceleration of appreciation) with home prices falling (depreciation). Don’t be fooled. Slower price growth is still growth.One reason why home prices are going back up is because there still aren’t enough homes for sale for all the people who want to buy them. Even though higher mortgage rates cause buyer demand to moderate, they also cause the supply of available homes to go down.
So should you wait to buy? A better strategy would be to buy now. Especially if you are a first time homebuyer, we recommend buying in this market, over unstable rents and unpredictable housing costs. If you are looking to buy on The Main Line, contact Kimmy Rolph Real Estate today!
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