I’m sure you’ve seen on the news that home prices continue to rise, and that it’s a sellers
Happy family with agent realtor near new house.
market.
Take the latest report from the National Association of Realtors which showed that the median sales price of existing homes rose to $253,800 in May. That’s up 5.8% year-over-year and the highest reading since last June ($247,000).
Given the steady climb in home prices, it’s only natural to wonder what the underlying cause is.
What Causes Home Prices to Rise
Supply and Demand
When it comes to home prices and what causes them to rise or fall, it all comes back to the basic economic principle of supply and demand.
When we’re talking about the housing market, demand refers to the amount of homes desired by buyers, while supply refers to the amount of homes available on the market.
When demand rises and supply shrinks, that’s going to cause home prices to shoot up, as it breeds fierce competition among buyers.
“A recent Zillow report had Las Vegas’ median home price 10.2% higher than last year which beats the national average of a 7.4% increase. Our prices are being driven up by a lack of inventory. Current listings in the MLS are less than a two month supply of homes. Homes that are in good condition, in desirable neighborhoods, and priced right are selling quick.”
What Rising Prices Mean for Homeowners and Homebuyers
Find out what’s happening in your local housing market
It’s important to note that housing markets vary drastically from region to region. While home prices have been rising on average nationally, there are varying degrees of increases and even some places where home prices have fallen.
Figuring out what the situation is in your local housing market is a crucial first step in deciding what kind of action you should take.
NPR recently published an article with an interactive map that lets users see how home prices have fared in different parts of the United States. Take a look at the map to easily get an idea of what has been happening in your neck of the woods.
In all likelihood, home prices in your housing market have gone up and are poised to go even higher. With prices rising and inventory down, we’re seeing that many homeowners think right now is a great time to sell.
In fact, just last week the Fannie Mae Home Purchase Sentiment index for June came in at 88.3, which matches the all-time high set in February. According to the report, 39% of Americans said that right now is a good time to sell a home (a new record high) and 30% said that right now is a good time to buy.
Selling your home
So if you’re planning on selling your home right now, it’s very likely that you will have no problem find a buyer. Just make sure to be on the hunt for a house to move to before you list because it’s possible you’ll be done with the sale sooner than you think.
Buying a home
For anyone planning on buying a home, it you will probably get a better deal if you act sooner rather than later. Not only are home prices continuing to move higher, but mortgage rates are also rising.
Ruth Schoenherr is a mortgage broker who will help you find home loans in the Clearwater, Palm Harbor, Largo, Safety Harbor, St Petersburg and Tampa Bay area. For more information, go to her web site at www.ClearwaterMortgageBroker.net.
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