In short, the absolute answer is yes. But why?
First, it’s important to recognize that human beings are genetically pre-disposed to default to the negative in most situations and buying a home is no different for many, especially first-time homebuyers. It’s how our brains work to protect us from danger, whether the threat is real or imaginary. When it comes to buying a home, there are many aspects to look at from a micro and macro level. Here are key points to look at if you are considering buying a home in this market.
We are seeing more inventory on the marketplace as of recent (which is relative, yet worth noting) and this is typical in the spring and heading into summer for those moving or trying to move around the school schedules with summer break and before the start of the next school year.
According to census.gov, there are 330 million people in the U.S. and 130 million household formations, with 1.4 million household formations being formed currently. A household formation is someone that resides in a property without relinquishing one. Examples include leaving the nest from mom/dad and going out on their own (buying or renting), a couple that is splitting and one person is getting their own place… someone moving into a new place without having a place to sell. These formations are absorbing the supply out there.
There are currently around 1 million homes in the U.S. for sale – 60% (600k) of those homes are under contract, leaving approximately 400k homes to meet demand, well short of balance when looking at buyers and sellers. That said, demand has been easing slightly due to increasing home prices and rising interest rates; however, there is still enough activity in the market to support current listing values.
While we may in fact see home prices start to slow their rapid rate of growth, this is likely not the start a year-over-year trend. There is a big difference between bottom-level appreciation or deceleration vs. depreciation.
In other words, whoever has owned their home the longest is sitting on the most equity. When it comes to gaining equity and building true wealth, time is your friend as a homeowner. Waiting for a perfect opportunity, whether that’s anticipating price decreases or lower rates, often backfires as markets
fluctuate due to several variables at any given time. Delaying action can be a frustrating proposition, especially in popular markets where housing remains severely limited.