Ever wondered where the end will be with rising home prices? Will they ever go down or at least level off for a while?
Although much has changed in the way real estate brokers conduct business in the last year, people are still buying, selling, investing, and moving forward with life plans regardless.
So is all the hype about median home prices being sky high really a thing? In my opinion, the answer is “it depends”
Currently the average rate on a 30 year fixed loan is at 6.87%. This is up from 6.77% a year ago. In real world terms this means the same amount of money you need to borrow is going to cost you more thereby decreasing the amount you have for other life expenses.
If you’re a new buyer or just getting started in life your typical first stop is a starter home of some type. These are almost always at the bottom of the price range when you include the entire available market. They are simply the most affordable from a gross cost standpoint.
But data would now suggest the median home price is way higher than first time homebuyers may be expecting. The current national median price is $419,200. In the west that number is significantly higher at $615,300. This is 36% higher than 2015 Q4 and 70% higher than 2010 Q4.
In my opinion, this higher median price is somewhat due to less first time home buyers in the market and more people with cash making purchases. When’s the last time a contingent offer made it to the finish line? Seems like the market is flooded with cash which may suggest there isn’t as high a need to borrow.
