Buying a home has become an impossible task for many Americans.

Americans who want to buy houses face a big shock due to the high house prices (Getty)

To buy a home and become a lucky owner in the United States, all you have to do is place a quick bid and offer $ 100,000 to all interested buyers. Americans who want to buy homes are therefore facing a major shock due to the rise in house prices, in addition to the fact that the sector is currently affected by the high interest rates paid on loans.

“I’ve seen about 150 homes since 2019,” Liz Stone, who has been trying to buy a home in suburban Washington for three years, told AFP.

Stone made 4 bids above the asking price, and the additional amount she offered was $ 100,000, but all her requests were rejected.

Liz Brent, founder of the real estate agency GoBrent in Silver Spring, Maryland, adjacent to Washington, notes that homes in the area around the capital sell for 4% to 5% more than their starting prices.

Brent noted that one of the homes was sold for more than one million dollars, while it was initially offered for 840,000 dollars. She tells AFP that “one person wins and 20 others lose” in each sale, given the large number of people who want to buy and the small number of people who are sold.

The number of housing units was already low when property sales stagnated due to the Covid-19 pandemic, and construction companies could not tolerate the situation due to a shortage of workers and disruptions in global supply chains.

The decline in the number of homes has led to a rise in prices, which has prompted the Federal Reserve to raise interest rates to reduce market pressure due to inflation.

Brent says buyers must be willing to “take a big risk” in these circumstances, and must be able to pay large sums without having to incur any emergency expenses, such as a home inspection.

Stone sold her home about a year ago to get cash to buy a home, but since then she has been forced to rent housing as prices have continued to rise.

She narrows her search because her nine-year-old son, Emmett, is happy at his new school. With a smile, Stone expresses her frustration: “I missed my chance to own a home.”

US home loan rates rise

Buyers are currently facing another challenge, namely the high interest rates imposed on loans, after reaching low levels not seen before during the pandemic period.

The interest rate charged on a 30-year fixed-rate loan, the most common in the United States, has risen to 5.11%, the highest level since 2010, compared to a rate of 2.96% last year. This rise in interest rates will make real estate out of reach for many buyers.

Fortunately, Rory Moleda (30) and Stuart Malick (29) were able to buy a two-bedroom apartment with parking in Washington, after their search for an apartment lasted only four months, during which three offers were rejected.

“We are very happy,” says Molida. But interest rates began to rise rapidly between their search period, which began in October, and their purchase of the home in February. She notes that the interest rate was 3.5% when they started looking for a home, but “it was witnessing a slight increase in conjunction with every home we inspect.”

The higher interest rate means that the monthly installments to be paid will be much higher than expected. High prices and rising interest rates began to curb sales and increase the number of homes available, which reduced market pressure.

Lawrence Yun, chief economist of the National Association of Brokers, notes that prices should rise only 5 percent this year, much less than the 17 percent jump last year.

House prices in the United States are expected to continue to rise

Brent believes a small increase in the price of homes will not help solve the deficit problem. She says: “We are currently witnessing a huge shortage, and it is impossible for the available homes to return to a healthy level, so we will see a steady rise in prices,” warns that the rise during the pandemic period will exceed and may continue. for another decade.

Yun notes that a large number of construction companies went bankrupt in the wake of the global financial crisis of 2008, which affected the real estate market. While conditions are expected to improve in Washington and its suburbs, some markets will still see strong demand.

“Areas with affordable housing and many jobs will continue to see high sales, as well as areas where wealthy retirees move and buy property with cash,” he says, including Atlanta, Georgia, San Antonio, Texas and Florida.

(AFP)

Leave a Comment