Housing Market - Is it Good Time To Buy a House
US Housing Market is facing a tough time as home prices are at a record high along with rising interest rates. Home affordability in 2022 is the worst since 1989.
NAR housing affordability index fell to 98.5 in June 2022 which is at the lowest after 1989’s level of 98.3 (Values below 100 indicating that an item is less affordable)
Index Fall In 2022
Consumer confidence in the Housing Market is at the lowest point since 2011. The consumer confidence index dropped to 62.8 in July 2022 which was at 93.7 in 2019.
It simply means that buyers and sellers are pessimistic about the housing market and more people believe that it is not a good time to buy a house.
It's Not Good Time?
There is a 46% increase in existing home prices in the last 3 years. The home price hikes have not affected demand in 2020 & 2021 as interest rates were at a record low.
Consumers are more concerned about rising interest rates and inflation. The high mortgage rate has caused a sharp drop in sales of new & existing homes.
The average 30 Year Fixed Mortgage rates hit a record high near 6% which was around 3% at the start of 2022.
Record Hit In Rates
As per the NAR’s Data:
Single Family Home Price Price $423,300 Vs 94,800
Mortgage Rates 5.6% vs 10.6%
Family Income $91,952 vs $34,128
2022 vs 1989 Prices
If we consider all things then currently, the house prices are too high. So if you buying now (2022) then you are paying 15% to 25% extra compared to 3 years ago price.
You Are Paying High
Well before taking any decision ask these 3 questions to yourself
1 Do You Need A House?
2 Is Your Income Secure?
3 What's the Debt-Income Ratio?
Should You Buy House?
Top 5 Cities To Buy Affordable House Under $300K