6 reasons will not decrease home prices, according to this broker

As a real estate professional, one of the most common questions I get is “When will the prices of homes decrease?”

From logical Buy a house It is a huge financial decision. With the main headlines that predict collision, chips and market RetreatIt is natural that you want to wait for the housing market It becomes more affordable.

However, real estate does not act in the way many people believe. Certainly, the values ​​of the house can fluctuate, but the prices Stalled at its highest levels ever. We can partially blame inflation, making everything more expensive. We can also blame on A massive lack of housing To maintain competition. Through most of the United States, we still have enough homes available for those who want to buy them.

It is my job as a broker to tell my customer Never rush And buy the first house they see. But if you are still sitting on the margin, awaiting a significant decrease in home prices, it may be Wait forever.

House prices are not decreased soon

Many people believe that real estate like stocks – prices rise, and prices have decreased. If you take the market time, you can enter into The lowest possible price. With the exception of homes are not like stocks at all.

House prices are not decreased suddenly. A mixture of factors prevents them from declining significantly, from supply and demand to inflation, from Mortgage rates To the emotional homeowners’ association with their characteristics.

I was in real estate industry for a long time enough to know that housing declines do not occur in a vacuum. Let’s be exposed to the main reasons that make a significant price decrease in today’s market unlikely.

1. The supply is low, the order is high

In essence, the housing market is driven by supply and demand. When there are more buyers of available homes, prices rise. Depending on the report it has read, the United States is short between four and six million homes.

Reducing the severe polls of homes was a problem for more than a decade. After the 2008 financial crisis, House construction slowed dramatically And never discover completely backup. Laws dividing restrictions and High construction costs It made it difficult to build new homes at the necessary speed. In many regions, the high cost of fracture on the new construction stimulates builders on focusing only on high -end homes, with leaving Buyers for the first time With fewer options.

At the same time, the demand for homes is strong. Millennium generation, the largest generation in the country, in their main years, and many of them are determined to buy. As long as the market The request exceeds the offerHouse prices will remain strong.

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2. Inflation keeps home prices high

If you have gone to the grocery store, fill your gas tank or paid for any service recently, you have seen directly how Inflation affects prices. The housing is not different.

Inflation puts a long -term upward pressure on prices. After the peak in early 2022, inflation began to mitigate yet The interest chain of the interest chain in the Federal Reserve. But modern data shows the high prices of consumer again.

With inflation erosion the value of money, concrete assets like real estate become more expensive. The house, which costs $ 300,000 in 2010, will now deserve only about $ 427,000 of inflation alone. Even if the demand for housing is temporarily cooled, the domestic values ​​tend to rise over time simply due to how our financial system works.

3. It costs a lot to sell a house

Selling home is not so simple as it is online and waiting for offers. It is a process that comes with great costs for sellers, including real estate commissions, Close costsAnd gradual expenses and possible reforms.

For many home owners, the sale is costly and has many financial logic. Sellers prefer to stay instead of making a financial strike, and fewer homes in the market are prohibited from declining.

4. The effect of the rate is freezing the width

One of the biggest reasons why current homes are not to reach the market.

During the epidemic, millions of home owners were imprisoned at very low mortgage rates, some Up to 2 to 3 %. These are homeowners Not For sub-mortgage trading SUB-3 % for 7 % new mortgage. Even with the high household values, many home owners do not want to obtain a much higher mortgage payment for their next home.

Even mortgage Prices decrease dramaticallyMany home owners will remain in its position, keep the stock narrow and the prices are fixed.

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5. People who sell homes also buy them

Most sellers are also buyers. Each house is usually replaced by another purchase. Unlike the year 2008, when the mortgage was flooded in the market, today sellers usually move by choosing, not motivated.

The demand for homes has a great relationship Stages of life. People marry, have children, move to jobs, reduce school size or search for better schools. Even in a highly modified environment over the past two years, these factors have kept the housing market moving.

6. Home owners see a higher value in their properties

People have a deep emotional relationship with their homes, and this plays a role in pricing. When homeowners see a neighbor’s house selling for the top dollar, they often believe that their house deserves the same or more. Even in the slower markets, House owners They hesitate to accept the lower offers unless they have to sell them at all.

Unlike stocks, where people rush to reduce losses, homeowners tend to stick to their property rather than a perceived loss. This is another reason that tends to have home prices to be sticky, even during economic shrinkage.

Will the recession decrease home prices?

I often hear an argument that home prices will decrease if we enter the recession. Although it is correct that economic contractions can affect housing, most of the recession does not lead to a significant decrease in prices.

Historically, the prices of homes remained stable or even rising during the recession. Workers’ layoffs tend to influence low -income workers who are less likely to become homeowners, and those who own their homes usually have sufficient royal rights to avoid troublesome sales. Unlike the year 2008, where the risky lending ImprisonmentHome owners today in a much stronger financial position.

Why does it cost more to wait to buy a house

Over the past 1960s, house prices have been estimated at a rate of 4.6 % annually. If you are waiting for a stay, you are betting on a significantly fixed direction.

Even if the prices of homes are stagnant, interest rates may remain high, which affects the ability to withstand costs more than a slight decrease in prices. It may end at a cost of more to wait. Renting instead of buying means losing it Years of equality at homeInflation will continue to make homes more expensive over time.

Tips for home buyers

If you are trying to decide if you want to buy, focus on your financial position instead of trying the market time.

Financial stability: If you can bear a PremiumMake sure to pay your expected monthly mortgage comfortable and sustainable. You must also have enough money in the bank to close the costs, Insurance, taxes and other home owners fees.

Consider different markets: Not all real estate markets are created equally. Be aware of what is happening in your specific area. At the time of this article, the Florida stocks grow while the northeast is still in a very large number of supply.

Think in the long run: Real estate is not related to what will happen today or tomorrow, but contracts from now. As a rule, plans to stay in your home for at least five or seven years so that short -term market fluctuations are not important.

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