Attend a cocktail party or any social gathering for that matter and it typically doesn’t take long for real estate to be discussed in some capacity. In fact, one of the most common questions that we receive at Live South Florida Realty, Inc. is: “Is now a good time to buy a home?” Of course, this is a broad question and as with anything having to do with real estate, your local market dynamics and personal financial situation will dictate the answer to this question.
According to a recent survey by Fannie Mae, a record-high 82% of Americans believe it is a bad time to buy a home. This is up from 78% in June and is the highest level of pessimism since the survey began in 2010. So why do so many Americans believe that it is not a good time to buy a home? We discuss below.
Factors impacting the negative sentiment to buy a home
- Rising mortgage rates: The average interest rate on a 30-year fixed-rate mortgage is now over 6%, the highest level in over a decade. This makes it more expensive to borrow money to buy a home.
- Low inventory: The number of homes for sale is at a record low, which is driving up prices. In some markets, there are only a few weeks of inventory on the market, which means that homes are selling quickly and often above asking price.
- Inflation: Inflation has been at a 40-year high over the past year, which is making it more expensive to buy everything, including homes.
As mentioned above, all real estate is local. Furthermore, the decision on whether or not to buy a home is multifaceted. While market dynamics certainly play a big role in this decision, it is also extremely important to consider your personal financial situation and goals. In addition to consulting with your financial advisor, it is important to also speak with your real estate agent. He or she should be able to give you an honest assessment of your local market and how your personal situation relates to it.
Are you thinking about buying a home in South Florida? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.