Houses are still hot commodities
By WVUA 23 News Reporter Aajene Robinson
U.S. home prices are surging, and some are saying it’s because of the momentum of the housing market, but houses are creeping out of reach for many potential buyers because of rising inflation and interest rate hikes.
Local realtor Eric Gaines said there are two reasons why this is happening.
“One is building materials, 2-by-4s, roofing materials and plywood, all those things to build a home are increasing in cost,” Gaines said. “The second thing, the main thing, is there is a shortage in the inventory. It’s basic supply and demand. Because we have fewer houses, the prices are rising.”
As the U.S. Federal Reserve raises its interest rates, mortgage rates increase as well. At the moment, interest on a 30-year mortgage for someone with good credit could be higher than 5%. It wasn’t too long ago that home buyers with decent credit could pay as low as 2%.
That 3% increase will result in paying thousands of dollars more over the course of a loan, or even higher.
Gaines said there’s no time to wait for those who may be on the precipice of qualifying for a loan, because by the time next year comes around the prices or interest rates could be too high.
“All the market indicators show that increase is going to continue to go up and not come down anytime soon,” Gaines said. “Also, the price of this inventory shortage that we are already in so purchasing now would be a great idea.”
If you’re in the market for a new home, your best bet is getting prepared, he said.
“Go to your lender, get pre-qualified and at least be in a position to purchase a home,” Gaines said. “That way when you find your house you don’t have to scramble.”