The US housing market is seeing a hike in the demand for houses and buyers are paying excessive amounts to purchase their favorite homes. Contrary to popular beliefs, the Covid-19 crisis has not affected the growth of the US real estate sector to the expected level.
Now, the current trends show the high bidding of home prices by buyers. Besides, there is a low supply of homes and it is leading to continuous home price growth. Lower borrowing costs are also responsible for the increasing demand for the US housing market.
Currently, buyers are willing to pay sellers an extra money value of $1,00,000 than the asking price of a house. Moreover, they are paying separate amount to other buyers to keep them away from homes.
In areas with low mortgage rates, home prices are likely to spike even more in every region of the US. Since people are working from home for more than a year, they are now buying homes for working comfortably.
Apart from this, many people in the US who lose their jobs are starting their businesses from their homes only. Hence, they are searching for homes with office spaces and they are also making changes to create a specific working environment in their homes.
People Focus on Buying Residential Houses As the Economy Improves
As the economy is improving, people are focusing on buying residential properties on a large scale. Hence, they are visiting reputed home sellers to strike the right deal. The scarcity of homes is making them pay more for their desired homes.
Since 2006, no year has seen a remarkable hike in home demand than the year 2020. The pandemic has made people work from their homes. Especially, housing properties in low-density suburbs are seeing an increase in their demand.
Home Prices are Not Likely to Decline Soon
People are even buying two homes to live in one just to save property tax. Hence, they are putting extra money to buy a new home in a separate transaction. As per the information given by Realtor.com, the home asking price shot up to a new height in May 2021 to reach $3,80,000.
It saw an increase of 15.2% from the last year. Although home prices didn’t decline from the last year, the home price appreciation has slowed from the last month by 2 percent.
Since the home inventory is going to shrink over time, homebuyers will not see any relief in the coming time. The median home price is expected to reach new heights in the coming months before coming down slowly.