Are Home Prices Going To Go Down Anytime Soon?
Home prices seem like they keep going up and up and up. However, based on our research, we think there may be some relief coming soon. Let's go over the four reasons why that is:
1. Investors have been purchasing many homes. In the major cities like Salt Lake City, Utah, or Austin, Texas, investors have purchased more than 50% of homes, especially in the nicer neighborhoods.
2. Investors have increased rents. After buying these homes, investors increased the rent to cover their mortgages. Rents have gone up 25%, while the average wage has increased only 5%. That’s a huge difference, and people may stop paying their rent on time because of it. If that happens, investors will have no choice but to put their homes on the market for sale.
“Rising rates might cause some buyers to back out of the market.”
3. Interest rates are rising. Last year, interest rates were hovering around 2% at this time. Right now, we’re looking at interest rates around 4% for a 30-year loan, and homes have still gone up in price. This will raise mortgage payments and cause some buyers to back out of the market.
4. Gas prices are increasing. Every time gas prices go up, home prices seem to go down. It happened in 2008 and 2001. We’re seeing a huge increase in gas prices, so home prices might drop in a few months.
If you’re a buyer who’s exhausted by trying to find a home, we can help. If you are thinking of selling within the year, now is the best time. Just call or email us with any questions; we'd love to help!