Dear friends and clients,
If you’re looking to buy a home, there is finally some good news. Mortgage rates remain near record lows while inventory has risen. Even home price appreciation has slowed a bit. To top it all off, we’re moving into the fall and winter, which are usually less competitive seasons for real estate.
Nicole Bachaud, an economist at Zillow, notes, “September was the second month in a row that month-over-month price appreciation pulled back, signaling that moderation in home prices is around the corner as we come into 2022.” Nationally, there were 4.1% more homes for sale in August than in July, signaling an increase in supply. While this is certainly good news, it doesn’t mean the market has cooled down.
“Things aren’t as frenetic as earlier in the year, but this is still a very hot housing market where demand far exceeds supply in most markets,” Greg McBride, chief financial analyst at Bankrate, mentions. Buyers should still expect to see a competitive market. You may still have to deal with multiple offers and consider various concessions, but this may be the best window to buy.
While price appreciation has slowed these past few months, Jan Hatzius, a head economist at Goldman Sachs, states, “Our model now projects that home prices will grow a further 16% by the end of 2022.” Bachaud agrees, saying, “We still expect prices to grow 13.6% by next September.” This means the market for next year is likely to stay competitive. However, if you buy now, you have a chance to enjoy that same price appreciation on your new home.
This continued price appreciation is fueled by an ongoing housing shortage. While inventory has risen since spring, it still remains well below pre-pandemic levels. This is reducing the number of new homes that hit the market and is only made worse by the lumber shortages and supply chain disruptions.
Experts agree that this housing shortage and increased demand are why our market is so strong. There is little to no chance of a crash since the appreciation is driven by this imbalance of supply and demand. Bachaud says, “Mortgage rates have also stayed stubbornly low, making now a good time to buy and lock in a relatively low payment if a buyer finds a home that fulfills their wish list and that they can afford.” Now may be the best time to lock in low rates and still experience significant appreciation next year.
It’s no use waiting for prices to go down. Instead, you should think about buying now and locking in a great rate while the market is less competitive. If you’re interested in buying, click here to see all current Austin homes for sale right now.
If you’re considering buying a home or have any questions about real estate, feel free to reach out to us at 512-829-8000 or reply to this email. We’d love to help you meet all of your real estate goals.
We look forward to hearing from you,
Looking to buy a home? Looking to sell a home?