How Home Prices Are Still Strong With Rising Rates
No matter where you get your news, it's impossible to miss.
- The economy is in trouble
- Interest rates have gone up making housing unaffordable
- The housing market is due for a crash
But, surprisingly, home prices are still strong. Why is that?
According to the Houston Association of Realtors, the average price of a single-family home rose to $426,494, which is a 9.9% increase from July 2021 to July 2022.
Now, granted, there is some slow down. The peak of the market was in May where the record high average of $438,844 was reached. But for July this year, a return of 9.9% year over year from July 2021 to July 2022 is an excellent return!
So how is the market still strong?
1. It’s supply vs. demand
Depending on the research, it’s projected that the U.S. is still short on supply by 3.5 to 4 million homes. This is keeping demand strong.
2. We are fortunate to live in a strong area
From cost of living, to job transfers and opportunities, to the weather (yes I have heard that one) - our area remains in high demand based on the interaction I have with buyers.
3. Interest Rates are not too high, historically
Yes interest rates are higher, but compared with the 8-15% in 1980’s it’s not that bad! I am still able to get 4.99% for my clients with strong interest rates.
4. Buying is almost always better than renting
Unless you are only going to live somewhere for a short time, being able to enjoy the appreciation of your home value, paying down your mortgage, and possibly being able to write off mortgage interest, almost always makes buying a home a better choice!
Thanks for reading!