Patrick Iturra Report,
Getting your own house is always exciting! But in the past few days, the Americans have been struggling hard to get the homes of their dreams. One of the primary reasons is the lack of options in the real estate market.
Low inventory has taken its pace across the country. With the arrival of the spring season, the pending home sales sink in February.
There has been a low inventory due to the pandemic. In the early period of 2022, most of the people were sent home for quarantine. Covid 19 has forced maximum people to work from home.
In comparison, some lost their jobs altogether. Schools shifted on to distant learning. This shift in the living style impacted a lot of people. It was natural to get reluctant and be unsure about the future.
So, let’s have a quick review of the critical points of the housing decline in the United States:
How did Home Declining take its pace?
Homeowners who planned to sell their homes in 2020 found various kinds of uncertainty in the familiar surroundings. Naturally, building supplies turned out to be scarce. Existing home sales declined! At the same time, builders stopped constructing new houses as well.
Let’s check out the critical points regarding the home decline:
· There was a 4.1% fall in home sales in February compared to January.
· It is the fourth straight month of home declines, indicating future closings. Not a good sign, though!
· The monthly payment in the median on a brand-new mortgage is taking a great deal compared to the typical consumer’s income.
· It has jumped 8.35% in February month as compared to January.
How has the decline in home sales affected the Mortgage Rate?
With the indications of the housing market’s busiest season, the pending home sales identify the signed contracts on the existing homes. It fell to 4.1% in February as compared to January.
Sales declined to 5.4% as compared to February 2021. Research analysts were also expecting the slightest gain.
It is the fourth straight month of declines with pending sales. These are the indicators of future closings in the next two months. But, it must be noted that the above percentage count is mainly based on the signed contracts in February. The mortgage rates have started to take off. It is a powerful indicator of how the market reacts to the new environment.
The count is based on the signed contracts in February. The average rate on the 30 years fixed mortgage is more than an entire percentage point greater than it was one year ago. In terms of the region, pending sales increased 1.9% each month in the Northeast but were down to 9.2% past the year.
Moreover, sales reduced 6.0% for the month in the Midwest and declined 5.2% from February 2021. The sales fell 4.4% each month and 4.3% annually in the southern region. In the West, it went down to approximately 5.4%. The spring season, considered the busiest time, has now been toppled with the enhanced mortgage rate. A survey was conducted, and there were many points that the agent had to highlight. Few agents believe that the buyers are not electing to rent in the alternative form.
What do potential buyers have to say about the expensive market?
The median monthly payment concerning the new mortgage is not taking part in a more significant share of the typical consumer’s income. It has increased to 8.3% in February in comparison to January. It is nearly 22% greater than it was in February. For the borrowers in the reduced end of the market, the monthly payment is almost 10% monthly. With enhanced loan application amounts, a mortgage applicant’s median principal and the interest payment in February experienced a hike of $127 from January and $ 337 one year ago.
Best opportunity to invest in real estate right now!
The low inventory rate and house decline have highly impacted real estate in two ways:
With the comparatively low historical rates, potential customers are entering the market. There are relatively more minor homes for sale. Few buyers have to compromise with the accommodation of the new house. The lack of affordable homes is the greatest challenge most potential homeowners face. Most houses sell extraordinarily rapidly and far above the asking price. The buyers on a strict budget have very little room for negotiation and repairs.
For the Real Estate Investors
It is an excellent market for well renowned real estate investors to improvise the already existing property portfolios. With the decreased mortgage rates, it is high time to sell the investment properties which are not performing.
This is a great time to sell the asset, recover the prices, and make the enhanced profit sooner. Also, luckily most of the landlords are making most of it. Also, the unstable housing market has led to improvised rental listings with upgrades and repairs that meet or exceed the market standards. Moreover, the sellers have sold their houses for the best value they can and are looking to lease them until the market is stabilized. Most of the masses have retired because of the pandemic and are selecting the best maintenance-free life that a home rental can offer!
So how long will the Housing Shortage last?
There have been times with the housing inventory shortage before too. A need mainly arises when there is only a 6-month housing supply.
It mostly takes 4 to 6 months to reshape the real estate market supply. But no doubt, it can also take years before the damage caused by the pandemic is refilled!
Make the most of this opportunity!
If you have been looking to buy a house or you want to build a passive income via real estate. Then, I am here to help you!
Over the past 25 years, I have been working as a strategic investment advisor and real estate consultant. I will guide you to identify and buy the right real estate property that fulfills your needs during all this time.
Make the most of the fluctuations in the mortgage rate and invest in the real estate market now!
For all your requirements, you can contact me here.
Patrick Iturra, Asset Manager at Estate Investments Group
Business development is the ideas, initiatives, and activities that help improve a business. My experience results in your company increasing revenue, growing business expansion, increasing profitability by building strategic partnerships, and making strategic business decisions.