What a difference 18 months makes in the housing market! Many who bought their homes at the peak of the real estate boom are beginning to regret their decision. A recent article from BuzzFeed tells stories of remorse experienced by several homeowners who are now in over their heads.
In this episode, we’ll explore the homeowners’ stories, and compare expert opinions. Finally, I’ll close the segment with my own thoughts. Make sure to stick around until the end to hear my observations about clients’ spending patterns once they reach retirement.Many who bought their homes at the peak of the real estate boom are beginning to regret their decision. Click To Tweet
Outline of This Episode
- [1:22] Many who have bought a house in the past 2 years now regret it
- [5:39] Advice from different financial advisors
- [9:02] My takeaways
- [11:33] My interesting observations about clients’ spending patterns
The housing market is finally starting to cool down
Since 2019, the median home sale price in the US has skyrocketed by 34%. With such a rapid increase in values, many who purchased homes between 2020 and 2022 are now underwater on their mortgages.
As interest rates rise and we head into a recession, the housing market is finally beginning to cool down after the historic pandemic real estate boom. However, while the market was hot, many Americans paid inflated prices for their homes. The housing frenzy brought on bidding wars, cash offers, little or no inspections, and offers well over the asking price.With such a rapid increase in values, many who purchased homes between 2020 and 2022 are now underwater on their mortgages. Click To Tweet
Many homebuyers got in over their heads
Now, many people who purchased homes during the housing craze are coming to regret their decision. After winning bidding wars with offers well over the asking price, a number of people are crippled with mortgage payments that they can’t afford. Other homeowners feel like they purchased a money trap since they chose to forgo inspections and are now stuck with homes that need numerous costly repairs.
To add insult to injury, those who bought during the market peak have no equity, so when housing prices fall, they can’t borrow against their home’s value to help pay for unexpected repairs. These unfortunate homeowners may have to wait a number of years for prices to recover.If you love the home, the community, and the reason for moving then any time is a good time to buy a home. Click To Tweet
Marry the house, date the interest rate
While purchasing a home can be seen as an investment, market conditions determine how good of an investment it is. Even though interest rates are rising and home prices are falling, it is important to remember that purchasing a home is a lifestyle choice and it can be an asset that takes time to see the profits from.
If you plan on moving to a new home to live there for ten years or more then it won’t matter what the housing market or interest rates are like. If you love the home, the community, and the reason for moving then any time is a good time to buy a home.
Resources & People Mentioned
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