The amount of homes for sale as compared to buyers interested in purchasing a home has been low in several areas across the country for several months. Realtor.com recently reported that there are 39% fewer homes on the market right now than this time last year.
Though there are fewer homes for sale, the number of buyers looking for homes is not decreasing. When there is a shortage in supply for an item that many people want, the price on that item increases. This is what is happening with home prices right now, they are steadily increasing.
This is very good news if you are planning to sell your home in the near future. If you are looking to purchase a home it can make things a little more interesting. It can even seem like discouraging news. One thing to remember as a buyer though, is total home price is not as big of a consideration as the monthly cost of a home. There are a few factors that play into the actual affordability of a home. Two of the biggest factors are the price of the home and the mortgage interest rate which helps to determine the monthly payment on a home.
Homes at Higher Prices are Still Affordable Today
Even though home prices are on the rise due to very high demand, they are still affordable due to the current historically low-interest rates of mortgages. Mortgage rates have fallen incredibly low. Just recently Freddie Mac announced that the average mortgage rate for a 30 year fixed rate conventional mortgage was 2.72%. The rate for the same time last year was at 3.68%. Though this is less than one percent it makes a huge difference when looking at the monthly payment breakdown.
Because of this buyers are able to afford more expensive homes than they would have been able to just a year ago.
So if you are hoping to buy a home and seeing the price points going up, do not be discouraged. You can still find a home that you love, in a neighborhood that you love, with all of the characteristics and styling that you dream about. A great idea, before you become too discouraged, is to go and visit a mortgage broker or lender and get preapproved. Pre-approval will give you a look into what amount of money a bank will lend to you and what the monthly payments will look like with today’s interest rates for certain price points. It is a very smart game plan to obtain pre-approval before shopping for homes. It just may be the encouragement you need that you can afford a home right now.
For help buying a home in Fishers Indiana please contact us any time. We would love to help you find a home you love in today’s sellers’ market.
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