The National Association of Realtors released their latest quarterly metro home price report last week. The report revealed that severely lacking inventory across the country drained sales growth and kept home prices rising at a steady pace in nearly all metro areas. Home prices rose 5.3% over the last quarter across all metros. The impact of low inventory gave home shoppers little to choose from. In many cases they had to outbid other buyers to close on a home. The result was a strike in sales from earlier in the year, and persistent price growth.
What this means to sellers:
Rising prices are a homeowner’s best friend. The rise in average sales prices has made present home owners more willing to sell their home. That willingness is one of the main reasons behind the inventory that makes it on to the market. Although it has not been enough to meet the demand, it has made the situation better in comparison to three or four years ago.
What this means to buyers:
In a market where prices are increasing, buyers might consider the cost of waiting. Obviously, they will pay more for the same house later this year or next year. However, as Construction Dive reported, the amount of cash needed to purchase that home will also increase. These factors have created a situation where the market keeps moving the goalposts, in terms of the down payment needed for first time homebuyers to get into a home.
Bottom Line: If you are thinking of selling and moving down, waiting might be more logical. If you are a first-time buyer, or a seller thinking of moving up, waiting probably does not make much sense.