For people watching their wallets – and who isn’t? – a negative economic headline might land like a wet blanket on your burning desire to buy a home.
But before you set your goals aside, it pays to bring perspective to what you see in the press. Because for each seemingly pessimistic report, there can be a positive interpretation for what it all means for your real estate decisions.
Appreciation rates
With the news that the pace of home sales is slowing and home price appreciation is flattening out in some communities, some pundits will contend that this may not be the right time to buy a home. But there’s a flip side to that argument. There is also evidence that housing inventory is up in many locales, which means more choice for buyers – and less competition among buyers that can help avoid unwanted bidding wars.
Financial markets
For example, we all hear the daily drumbeat about the volatility of the stock market. While you might read that Wall Street is wobbly, and think you should be cautious about making a major purchase, keep in mind that real estate in America holds a long track record as a safe and secure place to invest.
Over time, history shows that home values stand up well to the ups and downs of the economy. Since 1991, average home prices across the U.S. have increased 327.82 percent. In Colorado, that figure is 596.7 percent.
Affordability
Concerns over home affordability have been a constant subject of analysis, especially since the pandemic-era surge in prices. And with mortgage rates hovering around 6.75 percent, it’s become even more prevalent.
But the good news is that rates have actually been inching down in recent months, falling by about one-half percent (50 basis points) in that time. Combine that news with the fact that average wages have been increasing over the past two years, and affordability has improved for some homebuyers. The irony is, many of today’s headlines portrayed by some media as negative, are exactly what we hoped for a couple of years ago.
