The U.S. economy has seen home prices increasing steadily over the past few months. This might have something to do with the fact that existing home sales have fallen slightly since January.
It’s likely that increasing prices and inclement winter weather have affected home sales this winter. More buyers are holding off on making purchases in the hope that prices will drop and existing homes will become more affordable again.
Factors that affect the price of a home are certainly not limited to the seller’s asking price or the nasty weather that’s presumably been keeping buyers indoors and sellers wishing for more activity.
It’s not uncommon knowledge that the vast majority of home buyers are having to pay for their new home with the help of a mortgage. Paying cash for a new home isn’t something most families can afford to do, unfortunately.
Mortgage interest rates play a big part in the affordability of a home. With those rates higher than they were a year ago, many buyers are holding off and looking for a sign that the rates will drop. A lower interest rate allows buyers the opportunity to obtain a little more home for their money, and that’s something that no buyer feels bad about.
Location plays another big part in the affordability of an existing homes. Depending on where buyers live or what they’re looking for, home prices can vary substantially.
For example, an existing dwelling in New York City is going to cost far more than an existing home in a San Diego community such as Rancho Santa Fe.
Another possible factor in the recent decline in home sales is the season. Believe it or not, the season in which buyers look for homes has a huge influence on their decision to buy.
For example, the winter months are typically the slowest in terms of home sales. Buyers don’t get to see homes in their most attractive state, thanks to dead lawns and dying gardens and foliage.
This could have an impact on their vision of the perfect home and cause them to pass on making an offer on a home with which they would fall instantly in love in the midst of a lovely spring.
Furthermore, fewer buyers are interested in looking for a new home when the weather is cold and otherwise imperfect. The holidays don’t help either. Many buyers aren’t interested in buying a home in the midst of the busiest season of the year.
In between the travel to see friends and family, decorating and shopping, and holiday parties and events, it’s a busy period that leaves little energy or desire to shop for a new or existing home. What this means for buyers is a bigger market, more homes, and less competition in finding the perfect home.
With better weather approaching and the possibility of home prices and interest rates dropping, the spring of 2014 looks like a more promising time for home sales and the housing market. Fortunately for sellers, more buyers are looking at existing dwellings than are thinking of building. This opens up the possibility that buyers will soon come knocking.