By Bianca Wright
For the first time in a long time there are not enough homes to keep up with demands. According to Kevin Graham's Blog with Quicken Loans titled " What to Expect This Home Buying Season" he mentions how there is only three and a half months of inventory at this time. This simply means that its more of a Sellers Market. In other words, homes are being sold at a faster rate of which they are being listed. This is great for Sellers however, Home Buyers have to be well equipped to get in the market and battle for what they want. You have to be a solid, vetted Buyer. So What do you need to be a Solid Buyer? A few great ways to start is talk to a Lender. If your financials are kinda shaky it may be good to get advice on what you should do and shouldn't do leading up to the months you start your home search.
A little bit about my Journey: A few months ago, I decided I wanted to purchase a home sometime within the next 8 months or when my lease is up. I started speaking to a good friend of mine who is also a kick a!# Loan Originator. I told him my crazy impossible idea of wanting to buy a Home and he said "...well, lets get you started to see what you can afford..." this made me feel good so I started the process with him. Recently I told him I was named as an authorized user on a few credit cards that were leaning over the 50% use of credit mark. Using over 30% of a credit card would have a negative affect if not paid off in due time or before your statement closing date. I suggested that I could remove myself as an authorized user since I'm not the primary account holder. He said "...No, don't do it..." he explained to me that these credit cards may be the very foundation of my credit history and by removing them, my credit score may be negatively affected.
So back to the topic "So Many Home Buyers But Not Enough Homes" Aside from the Market being a Sellers Market, their are other factors affecting the issue at hand such as the low unemployment rate and the high cost of Labor & Lumber. According to Zillow Research titled "Why is home buying demand so high..." They explain how the unemployment is rate at a historic low. Before March of this year, the natural rate of unemployment has always sustained at 4.7%. In May the National Unemployment rate was recorded at 4.3% according to the U.S. Bureau of Labor Statistics. This means people are sustaining jobs and paying there bills. These are a few of the building blocks that makes for a motivated buyer, coupled with a pretty affordable market(depending on where your searching), it is still considered a great market for an average working class person to purchase.
Who thinks about the Cost of Labor and Lumber when buying a home? Nobody, and that's ok. Its one of those things you as a Home Buyer can't control unless you were thinking about building your own home. According to Kelsey Ramirez of Housingwire.com in her article titled "Home Builder Confidence Soars In May" She talks about how Home Builders are very optimistic about the future of building however they are currently dealing with "...high material cost and lack of lots & labor..." This is definitely one of the many reasons why there is only three and a half months of inventory left.
If its not one thing its another. With Real Estate there will always be to many variables to consider and uncertainty among all of them. Nothing is final, not even the final sales price of a home. The value will change tomorrow and the next day. The best thing you can do is become a solid Buyer, know what you want and know that you could afford it.
-Kevin Graham - What To Expect This Home Buying Season
-Zillow Research - Why is Home Buying Demand So High?
-Kelsey Ramirez - Home Builder Confidence Soars In May
Image by - glasbergen.com
I cover Real Estate Market information, RE Investing, legislation, loans and other stuff :-) My Goal is to bring facts to the table in hopes to open up a dialect among real people. Far to often the topic of Real Estate is perceived to be foreign when in fact it directly affects all of us. So lets talk about something that matters.