For the first time in years there is good news for the residential real estate market, that is, depending on which side you’re on. With the recent gains in the stock market, a continued rise in consumer confidence, and interest rates still at relatively low levels even when considering the recent upswing, and in spite of the allure of renting, consumers are showing a strong preference for home ownership across all demographic groups.
This is all great news if you’re a seller, but unfortunately it could spell trouble if you’re interested in purchasing your first home. Simple economics will tell you that with this strong demand comes pressure on prices to increase, and what makes things even worse, is a shortage of inventory, witnessed by real estate brokers across the country.
In a recent survey of real estate brokers, 62% of respondents named lack of inventory as their greatest challenge in today’s market, which means, at least in the short term, prices will continue to rise for the foreseeable future.
So, if you’re currently a homeowner, this is great news, provided of course, we’re not headed for another bubble, but if you’re a first-time homebuyer, things could get a bit more challenging as prices continue to rise.
What to do next? Well, this could be a great time to purchase your first home if you believe prices and interest rates will continue to rise, because over time, homeownership has consistently proven to be a wise investment. So, if you’re ready to take the leap, the trick then becomes finding the right home for you at a price you can afford, which when done correctly, will lead to many years of happiness derived from a smart investment.