Given the latest unsettling reports about everything from supply chain disruptions to the price of gasoline and groceries, almost anyone might hesitate before moving ahead with plans to buy a house. Mightn’t it be more prudent to wait until more stable conditions return?
One counter to that cautious stratagem is the example of recent history. A few years ago, would-be buyers who decided to hold off until the return of a more stable environment missed out on what, in retrospect, turns out to have been an opportune time to buy a house.
The fact is that residential real estate prices have risen steadily despite the unsettled public sphere. Buying a house has continued to reward buyers who ignored unprecedented upheavals like those accompanying the COVID-19 pandemic. There is no guarantee that tomorrow’s home buyers will wish they had taken advantage of today’s market (there never is)—but for those inclined to act, some factors do alleviate much anxiety:
For one, there is a growing consensus about the prospects for coming inflation—and its likely effect on residential real estate. Investopedia agrees with many analysts that there is “a correlation between inflation and house prices.” That view has it that increasing the money supply inevitably causes house prices to increase—not in direct proportion, but “meaningfully.”
Another offshoot of inflation is its effect on interest rates. The levels of inflation that are now being projected could one day make today’s mortgage rates seem like tales from a mythical past.
Last week, Realtor Magazine ran an article that pointed out how autumn is a season that’s historically advantageous for buyers. Based on a study that examined 33,000,000 single-family home and condo sales, the record shows that “buyers who close in October tend to get better deals compared with those who purchase during the spring buying season.” Their research indicates that buyers “may see a 2.9% premium on listings compared to 11.5% in May.” Considering today’s listing prices, that alone should give would-be buyers serious food for thought.