Homebuyers, take heed — buying a home these days can be as hostile as an arms race.
Though the economy is thriving with low unemployment and mortgage rates at record-breaking lows, the housing market supply hasn’t kept pace. All this as affordability continues to outpace wage growth in an overwhelming majority of counties with populations over 100,000.
The result is that first-time home buyers are especially deterred, the Wall Street Journal reported. Last year, they accounted for less than a third of all home purchases — the lowest in nearly 30 years, according to the National Association of Realtors.
As real estate brokers gear up for the peak of the sales season — springtime through June — the squeeze will be all the more arresting.
Some markets are hit worse than others. Only a quarter of U.S. counties larger than 100,000 people have real estate markets that did not see a decrease in affordability since last year, an analysis from RealtyTrac showed.
Even places like the Dallas metro area, one of the most historically affordable markets in the country, have not been immune. Since 2014, the Dallas region saw 13 months of consecutive year-to-year price gains above 8 percent — nearly twice the rate of the 4.7 percent national average.
“I knew things were competitive, but I didn’t expect it to be this competitive,” Nina Sastrodihardjo, a procurement manager for Hewlett Packard, told the Journal. She had to resort to an aggressive strategy in order to buy her Plano, Texas house, which she secured for $6,000 above the asking pricing and an expiration date on the offer.
“You have to tackle it like a project manager,” she said. [WSJ] — Cathaleen Chen