More buyers than homes available, housing market experts say
Experts say the housing market is extremely competitive, with many homes for sale getting 10-25 cash offers, which puts homebuyers in the awkward position of having to overpay just to stay competitive.
At the start of summer prices for U.S. homes rose faster than they had in 17 years as surging demand for housing outstripped the supply, according to the Associated Press.
The S&P CoreLogic Case-Shiller 20-city home price index revealed an increase of 17% in May from a year earlier on top of a 15% jump in April.
This marked the biggest since August 2004.
Markets with the most traction were Phoenix (where prices surged 25.9%), San Diego (24.7%) and Seattle (23.4%)
The U.S. housing market shifted as the social distancing of the pandemic motivated a number of people to trade in their apartment homes and for bigger houses in the suburbs.
Further motivation came in the form of easy money policies from the Federal Reserve, which kept mortgage rates near historic lows.
That said, the supply of houses for sale has been limited.
One reason for this is that Americans are reluctant to put their properties on the market and allow would-be buyers to poke around their homes.
Another factor in America's currently rocky housing market is the fact that rising prices have pushed many would-be buyers out of the market.
The Commerce Department reported last month that sales of new homes fell in June for the third straight month, sliding to the lowest level in more than a year.
Some experts say potential homebuyers determined to snag their dream home in the current financial and real estate climate should create a strict budget before they go home shopping and stick to it to avoid overextending themselves financially.
In reality, that may require putting off the immediate purchase of one's dream home and considering alternative options, such as refinancing, renting, or simply staying in a current living situation until the market stabilizes.
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