A challenging year for home buyers
2020 will be a challenging year for the housing market as a number of experts forecast that the housing shortage could become the worst in U.S. history. According to the 2020 Realtor.com forecast, sales of existing homes will fall 1.8% from 2019. This assessment seems in contrast to the current solid economy and strong employment numbers, however, the challenge for the buyers is not what they can afford but rather what they can’t find.
Not Enough Supply
Supply is going to be a problem, both in homes for sale and, especially, for new construction. Builders are reluctant to build more homes, especially on the low end for those first time home buyers. The demand is there but the millennials prefer to rent, the consumer habits change over the last 5 years. The increase in land cost, labor cost, and material costs for building new houses don’t pencil out at the entry-level therefore most builders build higher-end units in order to increase profitability.
Another point to make is that house prices are rising too fast at the entry-level. A dataset by AEI shows that entry-level houses are worth on average 50% more than they were at the beginning of 2012. The inventory of homes for sale has been falling steadily for several years and is at its lowest on the lowest end of the market. That caused prices to overheat, weakening affordability.
Mortgage rates are still low compared historically and last year’s interest rate dropped below 4% opened the door for many people to refinance current loans. The strong economy and employment numbers also fueled sales of new homes. This year, expectations are that the boom in refinancing will fade out and home sales will increase, but the cost of building any kind of housing remains high and will keep housing affordability at bay for many. The shortage in housing supply also means that home-sellers are in the driver’s seat. The shortage makes it much more difficult for buyers to find what they’re looking for.
Buying a Home in Greenville, South Carolina
Whether you are buying a Greenville, South Carolina real estate for investment, retirement home, or your dream home, it is wise to buy a home that you can really afford. Online resources that calculate how much house you can afford like this free spreadsheet can give you a rough estimate but it is still better to consult with your bank or financial adviser. Your bank officer will help you determine how much house you can afford, how much you’ll be able to finance through a loan, and what your monthly payments will be. That will give you a definite idea of your price range and you can target your home search based on your qualification.
Greenville, SC offers a wide range of housing options with price ranges that appeal to families and individuals of all income levels. Below you can search for homes in Greenville, SC. You can narrow down your search if you use the filter option so you can see property listings that fit your price range.
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