To Buy or Not to Buy....that is the question ......being pondered by many potential homebuyers! Although we cannot make that decision for you, we can help educate you, so that an informed decision can be made. Keep in mind that no one can predict what will happen within the housing market, with 100% accuracy, but we do follow real estate trends closely, to make an educated forecast about the future.

Lumber Prices are Coming Down, I Think I Should Wait to Buy and Save Money for an Additional Month to a Year....this is the common theme of many buyers of late. But do not make that your final decision just yet. Let’s explore this a little deeper. Although the price of lumber has come down from just three weeks ago, it is still 300% higher than two years ago. Economic advisors of the major groups Zillow, NHBA, MBA and banking institutions do not share the sentiment that delaying your home purchase, will pay off in the long run. Although it is imaginable that the current market is not sustainable, will holding tight to this thought process cost you money overall? The forecast and the experts believe it will. While lumber prices are going down, fuel and labor prices are on the rise. Major supply chains, beyond lumber, such as windows, doors, cabinets, flooring, siding, and paint, are in short supply. What does this all mean for the future home buyer? It signals that the market will not see a dip in prices for quite some time, if ever.

While You Waited for Lumber to Drop, You Likely Lost Money….

Home prices continue to soar, driven by a combination of record-low mortgage rates, the strong demand from buyers and a lingering lack of new construction. The dramatic rise in lumber prices has grabbed the headlines in recent weeks, but wood costs are just a small factor in the complicated equation behind home prices. The biggest pricing factor is simply, supply and demand. The U.S. population, and particularly the generational bulge of millennials entering their 30s and starting households, is growing faster than the number of homes available. It is expected that over the next 10 years an estimated 32 million households will enter the market. This factor alone could continue to push the market upward. If the experts are correct, here is a scenario of what waiting may cost you: Sale Price: $338,100 (new median price of home). If purchased today the interest rate would be 3.015% with zero points. This would calculate a monthly payment of $ 1,645.00 with 5% down. Assume the market increases only 3% over the next six months, however interest rates climb to 3.50%, as many experts believe they will. The new monthly payment would be $1,781.00 So while you waited to see if the market is going to reduce, you cost yourself $48,960.00 over the course of a 30-Year fixed loan.

The 2021 Housing Market Forecast

The housing market in 2021 will continue to explode like fireworks. Experts are seeing a post-pandemic rebound with steady mortgage rates, job recoveries, and the law of supply and demand, all working together to make home sales go kaboom! We saw a slow start to 2020. The unknowns of the pandemic had home buyers and sellers feeling a bit apprehensive about making the move. Toward the end of 2020, real estate gurus projected that low mortgage rates and the rise of remote workers with flexible schedules would keep home sales booming. Comparing those predictions with the numbers from the first quarter of 2021, it looks like reality is beating out expectations. The current situation flaunts a high demand for housing with super low inventory, leaving pent-up buyers scratching and clawing to enter the market.

Will home prices drop in 2022? Or will the Upward Trend Just Continue?  While no one can make such a prediction with complete accuracy, bottom line is it seems highly unlikely that housing prices in the U.S. will drop through 2022, while home values will continue to rise through 2021 and 2022. Many analysts do expect to see smaller price gains in 2022, compared to 2020 and the first half of 2021.