âLast fall having to stay home so much, it really made me decide it was time to buy a house,â she said. Among the main amenities she was looking for: outdoor space and more privacy.
Further motivated by record interest rates, Robinson decided to buy in the spring, when she expected more properties to become available. It would also give him time to get his finances in order.
âBut by the time I got pre-approved and started to take a serious look at homes, the market went crazy,â she said.
Robinson has set a budget of $ 250,000. But in his market – the suburb of Greenwood – homes started selling within days, with as many as 10 competing bids, and sometimes for $ 100,000 more than asking price.
â’Crazy’ to me is not going to be inspected because you want to be number one on the owner list,â she said. “It’s a risk I’m not prepared to take. And having to make an immediate decision the day you see her? Another thing that makes me really nervous.”
So she decided to put the house search on hold and continue to rent.
âThere are so many aggressive buyers and I’m not ready to compete with that,â she said. “I need to be happy today, but I want to be happy in a year too. If I pay too much or don’t get an inspection, it will cause bigger problems later.”
âIt is clear that sales are declining in part due to the shortage of inventory, but affordability is pushing some buyers away from the market,â said Lawrence Yun, chief economist of NAR. âHomebuyers are eligible for a mortgage based on their income, but with prices going up 20% or more, it just kicks them out of the market. “
Only 32% of consumers think it’s a good time to buy a home, according to the Fannie Mae Home Buying Sentiment Index for June. It’s a record. High home prices were cited as the main reason people were pessimistic about home buying. That sentiment was especially strong among tenants looking to buy for the first time, said Doug Duncan, senior vice president and chief economist at Fannie Mae.
“While all segments surveyed expressed greater negativity about buying a home in recent months, renters who say they plan to buy a home in the next few years have demonstrated an even greater drop in buying sentiment than owners, âhe said. “Affordability issues are likely to affect first-time homeowners more than other consumer segments who have already purchased their property.”
Yet even in the face of tough buying conditions, many potential homeowners remain determined to buy now, Duncan said, especially with mortgage rates still relatively low and a down payment ready to be used.
âI encourage my buyers to stay the course,â said Corey Burr, senior vice president at TTR Sotheby’s International Realty in Washington, DC. “They need to have a lingering confidence that their dream home will become available and that they can buy it. Just because it’s difficult doesn’t mean it’s impossible.”
Go out to the wild market by renting
It’s true, buying a house is not impossible. Lots of people do. But more people have tried and still are unable to buy. And there are limits to the time and emotional energy that buyers are willing to devote to being excluded from the market.
First-time homebuyers Steven and Laura Andranigian were planning to move from their home near Monterey, Calif. To Coachella Valley, Southern California, where they have family and Laura got a job from. primary school teacher.
Looking for a home that costs less than $ 500,000, they search for properties as soon as they are listed. Many times the homes are gone before they can even bid. They were laughed at twice for asking for time to get a pre-offer inspection. They have lost five bids so far.
“You are told, ‘Here are the 10 things you need to do to buy a house,'” he said. âWe did 20. And it’s always like, ‘Well, you can’t participate.’ Because there are people overflowing with money who also want to buy here now. “
They had been saving to buy a house for years and searching for months. But now they realize that their buying options are to buy something that needs work in an area they don’t want to live in, wait for a new house to be built and pay a premium for it, or to buy something over their budget.
“The only way to buy [a home that costs] over $ 500,000 is for my in-laws to give us or lend us the difference, âsaid Steve Andranigian. âBut it seems too much for people with good, stable jobs to get $ 200,000 from their families. Even when you’ve done everything right, do you still need more? ”
The Andranigians have decided to abandon their search for a home.
âWe decided to rent until the housing market calmed down or resolved itself,â Steven said.
But getting a rental won’t be easy either. The most infuriating turn of events, he said, would be having to rent a house they had previously bid on.
They’ve already seen some homes they were bidding on come back to market as rental homes right after they close. Even though a property like this would be the kind of house they would love to live in, it would pour salt into the plague of having to rent it out after trying to buy it, he said.
âHaving to talk to the owner and hear that they were sitting on a ton of money and wanted to rent it out when we were just trying to buy our first home would be really tough,â he said. âBut finding out that the owner is a hedge fund and owned by an anonymous company? Maybe that’s worse. We don’t want to rent the place. We want to buy.â