In today’s housing market, there are two main affordability challenges impacting buyers: mortgage rates that are higher than they’ve been the past couple of years, and rising home prices caused by low inventory.
After steadily falling over the winter, mortgage rates have started to rise in recent weeks. This is concerning to some potential homebuyers as the combination of higher mortgage rates and higher prices have made homes less affordable. So, if you’re planning to purchase a home this year, you too may be wondering if now’s the right time to buy or if you should hold off on your search until rates come back down.
The biggest challenge the housing market’s facing is how few homes there are for sale. Mark Fleming, Chief Economist at First American, explains the root causes of today’s low supply: