The US Housing Market Recovers As Low Inventory Drives Up Prices
The housing market has been a rollercoaster ride for the past couple of years, but it seems to be recovering this year.
According to RBN, while this is potentially good news, it is essential to note that the housing market is still volatile, and prices could start to fall again if mortgage rates rise or if the economy takes a turn for the worse. The US Federal Reserve might have slowed down its base rate increases, but it hasn’t ruled out doing so again in the future – and every time the Fed raises rates, lending gets more expensive across the board.
Still, it is marginally more affordable for buyers to purchase a home than it was during the early panic days of the Fed rate hikes. This has made it more affordable for buyers to purchase a home in 2023, helping to fuel the recovery of the housing market. Yet with the inventory of homes for sale remaining at an all-time low, this means that there are fewer homes available for buyers to choose from, which has created a bidding war and driven up prices. As a result, many homeowners have decided to stay put rather than sell their homes and move due to the uncertainty in the economy. This has also contributed to the low inventory of homes for sale.
The incipient recovery in the US housing market spells potential good news for homebuyers, but it is critical to be aware of the risks involved. The housing market is still volatile, and prices could start to fall again if mortgage rates rise or if the economy takes a turn for the worse.
If you are looking to purchase a property right now, be prepared to act quickly. Homes are changing hands swiftly in today’s market, so be prepared to put in an offer as soon as you find a home you like. Additionally, you may need to accept that you very well may need to pay above asking price, especially in the case of a bidding war on that property. Above all else, though, remain patient. The housing market is still volatile, so don’t get discouraged if you don’t find the perfect home right away.