The state of America’s real estate market is a cornerstone in the debate about the health of America’s economy. It’s becoming an increasingly important part of the presidential election as folks weigh up how happy they feel about their own financial situation.
High interest rates have weighed heavily on every borrower – that’s for sure. But many will argue the solution is not to reduce mortgage costs but to build more homes and release the pressure on the tight supply of properties for sale, thus lowering prices.
Freddie Mac’s recently-released report, “The May 2024 U.S. Economic, Housing, and Mortgage Outlook”, revealed our nation is short 1.5 million housing units that are either for sale or for rent.
Why is this important if you’re a buyer or a seller?
For buyers, a shortage of properties simply pushes the property values higher. It’s a classic supply and demand scenario.
And in today’s market, sellers need to consider the impact, too. The high interest rates mean borrowers are very cautious, dramatically slowing the volume of transactions.
The Freddie Mac report says housing units increased by 1.6 million compared with the corresponding period last year, reaching 146.4 million units in the first quarter of 2024.
It wasn’t enough to meet demand, though. Only an additional 1.5 million vacant units will give us a balanced market, says Freddie Mac.
There were 1 million more renter-occupied units than in 2023, while the national rental vacancy remained unchanged at 6.6%. Some 600,000 more homes were built for owner-occupiers across America, it said.
Here are five tips for buyers confronted by competitive situations to win a property:
- Get Mortgage Pre-Approval: Having your finances in order shows sellers you’re a serious buyer and ready to move forward.
- Be Ready to Move Fast: In a hot market, homes can sell quickly. Be prepared to make an offer when you find the right property.
- Widen Your Search: Don’t limit yourself to one neighborhood. Explore nearby areas or consider homes needing renovation or repair.
- Partner Up: An experienced agent who knows the local market will guide you through the process and help you to find hidden gems.
- Patience and Persistence: Finding the right home might take a while, but don’t get discouraged. You’ll find the perfect place.