HOUSING AFFORDABILITY: SHOULD YOU BUY NOW OR WAIT
Housing affordability has continued to be a challenge for the housing market as it grapples with a lack of inventory, due in large part to five key factors: labor, land or lots, lending, lumber and other material costs, and laws and regulatory burdens. COVID-19 has exacerbated a number of these factors — notably material costs and labor shortages — and kept inventory low, which have caused housing prices to soar and priced numerous Americans out of purchasing a home.
According to recent research from the National Association of Home Builders (NAHB), higher mortgage rates and double-digit growth in home prices are discouraging a growing share of buyers from engaging in the purchase process. At its peak in mid2021, 61% of perspective buyers were actively trying to find a home to buy; that share has dropped back to pre-pandemic levels at 46%.
Nationwide, of the buyers who were actively engaged in the process of finding a home in the first quarter of 2022, 67% of have spent 3-plus months searching for a home without success. Although the majority will continue to search for a new home, a growing segment of prospective home buyers are choosing to wait. According to NAHB’s latest Home Trends Report, the share of prospective buyers postponing their home search until next year has risen steadily from 20% in the second quarter of 2021 to 25% in the first quarter of 2022.
Chattanooga-area prospective buyers may be wondering if they should buy now or postpone. We posted this exact question to Patty Becknell, Loan Officer with Prime-Lending to find out. Becknell responded, “This is a question most people are asking right now due to the current economy. The fear of higher interest rates, general inflation and home price inflation are in the back of every person’s mind. What we need to remember is that the interest rates are still at a low level and with inflation causing prices to go up, the longer we wait to buy a home, the higher the cost we will incur. Now is the time to plan to buy your home - whether it is an immediate goal, or a long-term goal – count on us to assist you in reaching your homeownership goals!”
For more information on NAHB’s efforts to combat housing affordability and a list of professionals in helping you purchase your new home, visit the Home Builders Association of Greater Chattanooga’s website at www.HBAGC.net