Post-pandemic housing prices are increasing steadily, although at a relatively slower rate. The improving economy and low mortgage rates have aided in the increasing demand for real estate, which has clashed with low supply.
The trend of buying single-family homes among the millennials increases the demand particularly, although surveys are hopeful about a cooldown in the market prices in the upcoming year.
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Steady Increase in Housing Prices
Prices of properties experienced a significant drop during the start of the pandemic, but it took no time to revert its course. Surveys show that the median increase in housing prices is between 7-9% as compared to the previous year, as people are facing a hard time finding options in a market with ever-increasing demands.
Several factors are interconnected for this increase, which includes a fluctuating economy and high inflation.
Just like everything else, the search for the perfect home has also moved to the digital sphere, especially during the pandemic months when online platforms played a pivotal role in real estate transactions. Such real estate companies not only allow users to browse through properties and get in touch with dealers, but also provide modernized home-hunting services using 3D Home Tours, Virtual Staging, and Drone Videos.
People Moving to the Suburbs
Suburbs, also called ‘Middle Neighbourhoods,’ are the areas surrounding a big city that are well-connected with the metropolis and offer a safe and cheaper alternative for buying and renting homes that are in the demand right now.
People, especially those who want to look for single-family homes, are relocating to the suburbs, where tax rates are low, and the prices are affordable. These neighbourhoods possess all basic amenities like shops and restaurants, public transport, and maybe a tinge of greenery as well.
Fluctuating Mortgage Rates
The two years of the pandemic experienced a record low in mortgage rates, which dipped below 3% in early 2021. Since then, the rates have been rising steadily in 2022, with a percentage increase in three digits at some places. The crisis faced by the buyers seems inevitable, but one can expect something gentle in the future.
Rental Property Demand Declines
With the increasing demand for single-family homes, the demand for rental apartments has declined subsequently in 2022. People who are capable are opting for their own homes, while a section of younger professionals is moving back to their parents’ place to save money during the period of crisis. However, the rents are showing no signs of decreasing altogether.
What is the Right Time to Buy a House?
The economy is in transition. Although the problems with inflation are persistent, wages have started to increase, and people are getting laid off less in the post-pandemic era. The experts are expecting a shift in the momentum towards the buyers’ side in 2023.
Although the prices will likely increase, the rates are expected to be quite slower. One can just follow a ‘wait and watch’ approach and scour the housing market before making any decisions.