The US housing supply has been struggling to keep up with the demand following a surprising surge in the middle of the pandemic. Due to this, the options of new homebuyers are quite limited for the moment.
In this situation, people who plan to buy a new should look at the available homes for sale before finalizing the purchase. This is important since a home is a major purchase for many people. Even real estate investors should take this into account to avoid regrets in the future. Here are some things people should consider before making the final decision.
Home Location
When it comes to real estate, homebuyers should consider the location of the home. The location plays a big role in the value of the home. This is important since they cannot change it once they purchased the home. It can even determine if the resale value is high or low if the homebuyer plans to sell the house in the future.
They should make sure the value corresponds to the location. For instance, a home located in an area where some of the most powerful hurricanes in history hit should not be as expensive as areas that never experienced the weather disturbance. A home located in an earthquake-prone area should also be cheaper than homes located where no earthquakes have occurred in the past.
In addition to the location, homebuyers also consider purchasing homes in areas still being developed. At this point, the prices of the homes are still low compared to when the neighborhood or community is still up-and-coming.
Since it is not easy to know if the neighborhood’s home prices will go up in the future, homebuyers should study the area and look for signs if it will become popular in the future. They can study neighborhood trends, amenities available in the area, population, and employment figures.
Housing Supply
There is currently a housing shortage in the United States. But this shortage might ease if there is a construction boom to meet the increasing demand for new homes. While this is an ideal scenario, the construction industry is also facing some issues that can take time to resolve. These issues include the increasing prices of materials, particularly lumber, and a deficit in skilled labor. Restrictive zoning laws and supply-chain issues might also be hurdles that the industry should tackle before meeting the current demand.
One of the most glaring issues is the lack of skilled labor. The recession caused by the pandemic resulted in many workers losing their jobs. Some workers also left their jobs due to concerns about the virus. But the continued rollout of the vaccine might ease these concerns, and the workers may return to work soon.
With the high cost of materials, the government can negotiate suppliers from other countries to bring down prices. The reduction in prices can also solve the supply chain issues. On the other hand, the regulatory hurdles might remain unresolved unless the local and state authorities ease building restrictions.
House Price
The price of the home is another major factor that homebuyers should consider. When the pandemic started, home prices were relatively lower than the prices in recent weeks. Despite this, last year was a seller’s market due to the high demand for homes caused by the low mortgage rates.
Homebuyers can consider waiting for a buyer’s market when the prices of homes are down. Last year, the median home price in the US was more than $320,000 in October, which is quite high. But the price also depends on the location. Some locations offer lower home prices, while in other areas, home prices are high.
Employment Status
The homebuyer’s employment status also plays a major role in the decision to buy a home or not. When the pandemic started, many businesses closed, resulting in many people losing their jobs. The unemployment rate in April 2020 reached 14.4 percent.
While it improved after a few months, it is still a major factor that homebuyers should consider before buying a house. If they spend their savings to buy a home, even if they do not have a job, they risk losing it if they cannot keep up with mortgage payments. This is a huge gamble for people who are still on the lookout for a job. So, they might want to reconsider spending on a home until they find a job.
Buying a home is a major decision for many people. Due to this, they should consider the different factors before finalizing their decision on purchasing a home.
