Rising home prices have become the norm. The consistent boom to home prices, despite economic complications, led to yet another record in February. That’s when selling prices grew by the largest margin in any month since 1992.
According to the latest Mortgage Monitor, the overall price growth of single-family homes in February was almost 12% while other models placed home appreciation at 15%.
A closer look at individual ZIP codes provides a clearer look at how strong the real estate market is performing. For instance, in about 75% of the surveyed communities, the real estate market ranked at a strong level while the markets in 25% of ZIP codes were in the red-hot zone. Real estate markets characterized as soft or weak are virtually nonexistent.
Low inventory and interest rates are major contributors to today’s active real estate market. These factors continue to put pressure on the market too. As a result, affordability continues to tighten. For some, this means that 20% of their median income is going toward the monthly mortgage, representing a five-year high to the cost of owning a home.
Market insiders believe the trend of increasing prices is unlikely to slow down in 2021. An influx of housing inventory could provide some relief, but that has yet to materialize as for-sale listings have fallen by double digits this year. With fewer listings, home seekers are also facing the prospect of increasing interest rates as they compete to find their perfect home. They are confronting an uphill battle because inventory is down about 40% year over year. But with the peak of selling season still about a month away, there’s hope that the inventory picture will brighten.
While the direction of the market is evident, it remains filled with intricacies and challenges for buyers and sellers alike. If you’re thinking about selling your home, we can help you accomplish your financial goals and make the most of this unique market.
We have a strong track record helping families buy, sell and reach their financial goals. Let our commitment to transparency, excellent customer service and timely transactions earn your trust. With so much happening in today’s market, we can support you so you can seize every opportunity and make the most out of your biggest investment.