Housing prices in the United States have been on the rise in recent years, and this trend looks set to continue. This is good news for those looking to buy a home, but it comes with a caveat – mortgage rates are also on the rise.
Statistical analysis
The average 30-year fixed mortgage rate has risen from 3.95% in May 2017 to 4.61% in August 2018, according to Freddie Mac. This is the highest level since 2011, and while rates are still relatively low by historical standards, they are expected to continue to rise in the coming months.
The combination of rising prices and rates is making it increasingly difficult for buyers to afford a home. In some markets, such as San Francisco and Seattle, prices have risen so much that many buyers are being priced out entirely.
Reasons of soaring rates
There are a few factors driving the increases in both prices and rates. The most important is the strong economy, which is driving up demand for housing. The job market is strong, wages are rising, and more people are confident in their ability to buy a home.
The second factor is the limited supply of homes for sale. The number of homes on the market has been declining for several years, and this is driving up prices.
The combination of these two factors is putting pressure on buyers, and many are being forced to either pay more for a home than they had planned or to settle for a home that is less than their ideal. For those who are able to buy a home, the rising prices and rates may mean that they have to put more money down or that their monthly payments will be higher than they had anticipated.
Why are the house prices surging?
The average US house prices of homes in the United States has increased significantly in recent years. This is due to a number of factors, but the two most important are the strong economy and the limited supply of homes for sale.
The economy is the main driver of housing demand, and the job market is currently very strong. Unemployment is at a 17-year low, and wages are rising. This is giving more people the confidence and ability to buy a home.
What does this mean for buyers?
If you are thinking of buying a home, it is important to be aware of the trends in both prices and rates. You will also need to be prepared to budget for a higher monthly payment if you are planning on buying in the near future.
The rising prices and rates may mean that you have to put more money down or that your monthly payments will be higher than you had anticipated. However, it is still possible to find a home that is affordable, even in today’s market.
If you are looking to buy a home, there are a few things you can do to make sure you are getting the best deal possible:
1. Get pre-approved for a mortgage: This will give you a better idea of how much you can afford to spend on a home.
2. Shop around for the best mortgage rate: Rates can vary significantly from one lender to another, so it pays to shop around.
3. Be prepared to negotiate: In a competitive market, sellers may be more open to negotiating on price.
4. Don’t be afraid to walk away: If you can’t find a home that meets your needs and budget, it may be better to wait until the market cools off.
Conclusion
Housing prices in the United States have been on the rise in recent years, and this trend looks set to continue. This is good news for those looking to buy a home, but it comes with a caveat – mortgage rates are also on the rise.
The combination of rising prices and rates is making it increasingly difficult for buyers to afford a home. In some markets, such as San Francisco and Seattle, prices have risen so much that many buyers are being priced out entirely.
If you are thinking of buying a home, it is important to be aware of the trends in both prices and rates. You will also need to be prepared to budget for a higher monthly payment if you are planning on buying in the near future.
