Buying a home is a huge life decision and a stressful one. Yet, most Americans remain overly optimistic about the homebuying market. In fact, most people in the U.S. say buying a house is top on their list of priorities despite an ever-changing economy and in the face of a global pandemic.
However, many buyers have unrealistic expectations regarding home prices, which could leave them disappointed when they decide to jump into the market. Check out some key facts from a survey conducted by Harris Poll in conjunction with NerdWallet about the housing market below, so you don’t find yourself on the outside looking in with an unrealistic homebuying budget.
2022 was difficult
If history indicates the future, 2023 won’t be an excellent year for potential homeowners. Approximately 70% of people who wanted to purchase a home in 2022 were unsuccessful. The previous years’ numbers, paired with the fact that two-thirds of people surveyed believe that a housing market crash is inevitable in the near future, is no wonder budgets are skewed.
Mortgage rates
Most Americans surveyed believe that the current rates are higher than ever. But, the fact is the current rates aren’t any higher than the national average over the last 50 years. The current mortgage rates are indeed higher than most people are used to, but to say they are higher than ever before is just untrue. High rates aren’t a reason to delay buying a home unless you’re willing to wait it out for the long haul — the current rates are likely here to stay. Besides, if you budget for high rates and they do fall again, you’ll have an advantage you didn’t think you would.
Setting expectations
Many people are aware of the economy and high mortgage rates — “about one-third of Americans feel worse about their ability to purchase a home in 2023 than in 2022.” Yet, many buyers still have unrealistic price expectations. The survey found that the average home price is around $380,000, but most potential buyers expect to spend around $270,000. This expectation can set you up for failure immediately, so setting a realistic budget is crucial.
Pro tip: Considering your budget before venturing into the market will not only ensure you can afford the mortgage, but it will make the pressure of shopping way less. When you have clear lines established, you can limit your search from the beginning, and thus, manage your expectations.
Moving is always stressful, especially if you’re buying a house. If you’re currently in the market for a new home, you already know the inventory levels are low, and the interest rates are high; the economy is questionable, and many people fear a market crash is likely. So why would anyone buy a house right now? With the right expectations and a proper homebuying budget, you can enter the housing market of 2023 with confidence.
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