September 9, 2020
There is a housing crunch, with fewer homes than expected hitting the market during the COVID-19 crisis. The shortage is being driven by low-interest rates which increase buyer power, and older couples holding onto their homes while young millennials enter the market looking to buy. Further stimulus could increase the power of buyers even more going forward.
The COVID-19 crisis has changed lives all across the country, right down to the way that homes are bought and sold. In the early days of the crisis, many analysts believed that housing prices would drop precipitously, similar to what happened in the 2008 financial crisis. Instead, housing prices have remained strong. While they have dropped somewhat in major cities, they have risen considerably in suburbs across the US. This result has been driven by low-interest rates, older couples who are remaining in their homes, and young families who are looking to move out of the city and into the suburbs.
Low-Interest Rates Are Shifting The Balance Of Power To Buyers
With the crisis raging, central banks around the world have lowered interest rates. The situation in the US is no different. Low interest rates have made mortgages much cheaper than they have been in recent decades, which makes it easier for first time homebuyers to take the leap. Interest rates are expected to be relatively low for the foreseeable future, especially with the real economy struggling with high unemployment and slower growth. Young homebuyers are expected to continue to take advantage of this, which brings us to our next point.
Older Homeowners Have Less Interest In Selling
Older couples have less interest in leaving their home than ever. The COVID-19 crisis is especially dangerous for the older generation, which is leading them to be less inclined to sell. Millennials are looking to move out of dense cities and to buy in the suburbs. But since there is lower supply because older generations aren’t moving out, prices are increasing. Until the COVID-19 crisis lets up, analysts expect older couples to have less interest in selling. And these families typically have retirement savings and other forms of income to be able to weather the storm even if the economy continues to struggle.
There Has Been Less Home Construction In Recent Years
In the years following the 2008 financial crisis, there has been less home construction. That just increases the supply pressure in the housing market and serves to drive housing prices in the suburbs up even more.
If you are looking to sell your property without the hassle of having to worry about the state of the market, then you are in luck. You can contact our team at 4 Brothers Buy Houses. We can walk you through the process of selling your home for cash, on your timeline. You don’t have to worry about hiring a real estate agent, listing your property on the MLS, or handling any expensive and lengthy renovations. You can sell when you want, and get the money that you deserve. We can come by your property at any time and give you a free, no-obligation quote. Contact us today, and we can get to work.