Shark Tank star Barbara Corcoran recently stated she consistently gets the same question these days. That question is, “Is now a good time to buy a house?” If you follow Barbara’s advice, the answer is a resounding “yes” because you get to “pick your poison” of higher interest rates or home prices.
But wait…aren’t home prices already high? They have definitely increased compared to 2017, where home prices leveled off through 2019, according to Statisa.com. Keep reading to find out why there really is not a magic time to buy real estate - when you are ready to buy, just do it already!
Influence of Higher Interest Rates vs. Lower Interest Rates
If you are of a certain age, you may remember all the way back to 1981 when higher interest rates averaged 18.6%. In comparison, interest rates today are slightly over 7% for a 30-year fixed loan and just under 6.5% for a 15-year fixed mortgage. While we may think interest rates are high compared to a few years ago, they are nowhere near the highs of the early 1980s.
Back in the 1980s, home prices were lower, too - the median home price was $68,900. Remember that one of the significant factors influencing home prices is the cost of borrowing money. Higher interest rates lead you to lower home prices and vice versa. If we see another dip in interest rates, we can expect home prices to increase yet again.
Home prices in the Dallas-Fort Worth market are trending lower compared to last year due to higher interest rates. Median home prices in our area dipped over 5.7% to $405K.
When we look at the data, Barbara Corcoran is right - pick your poison because you are paying either more interest or a higher home price.
Economic Factors Play a Role, Too
While interest rates are essential, the overall state of the national and local economy is also a factor. When we have a strong economy, housing demand increases, leading to higher real estate prices. Ultimately, it’s a function of supply and demand.
Buyers and sellers also need to consider local economic conditions, such as unemployment and the total number of available jobs in their area. For example, the Texas Workforce Commission reported over 170K new jobs in the Dallas-Fort Worth market, a year-over-year increase of 4.24%. With our strong local economy, we anticipate a healthy real estate market, even if prices are slightly lower than last year.
Home Upgrades Matter to Buyers
According to sources, added conveniences such as a pool or ample living space can increase resale value by up to 7% in the luxury home market.
Can you imagine living through this scorching hot summer without a pool to cool off and enjoy? Home buyers can’t either, so if you have unique features that make daily life easier, you are more likely to sell your home quickly and at the right price.
Working with a real estate expert who understands the various factors influencing home prices in the Dallas-Fort Worth area is essential when selling or buying a home. Contact Milani Properties today to see if it makes sense to make a move in this real estate market - we are happy to help!
