Buying a home is an impossible mission for many Americans


Silver Spring (United States) (AFP) – House for sale. To become the proud owner, simply make a quick offer and outbid all interested buyers by $100,000.

In the booming U.S. housing market, homebuyers are facing a sticky shock as prices have soared, and now they’ve also been hit by a spike in lending rates.

“I’ve visited about 150 homes since 2019,” Liz Stone, a frustrated buyer, told AFP.

She has been looking for a home in suburban Washington for three years and has submitted four offers, each above the asking price, up to $100,000 more. All were rejected.

In the region around the nation’s capital, selling prices are four to five percent higher than the initial asking level, said Liz Brent, founder of real estate agency Go Brent, in Silver Spring, Maryland, just outside outside Washington.

She points to a house listed at $840,000 but sold for more than $1 million.

With each sale, “there is one person who wins and 20 people who lose”, she explains to AFP.

Housing supply was already tight when sales took off during the Covid-19 pandemic, but builders were unable to keep pace due to a shortage of workers and grumbling from the supply chain. global supply.

This shortage has pushed prices higher, and now the Federal Reserve is raising interest rates to ease inflationary pressures.

With these terms, buyers must be prepared to “take significant risks” and be able to pay significantly more without demanding unexpected things from sellers, such as a home inspection, Brent said.

Stone sold her flat nearly a year ago to have money to buy a house, but she has had to live in a rental since then as prices have steadily risen.

And Emmet, her nine-year-old son, is very happy in his new school, which limits the scope of his research.

With a smile, Stone admits she is discouraged.

“It’s almost like missing my chance to own a house,” she said.

Rising borrowing rates

Buyers now face another challenge as borrowing rates rise from the historic lows they were cut to during the pandemic.

Interest charged on a 30-year fixed rate loan – the most common in the United States – rose to 5.11%, the highest level since 2010, from an average of 2.96% last year.

This puts properties out of reach for many buyers.

Rory Molleda, 30, and Stuart Malec, 29, were lucky: It took them just four months and three unsuccessful offers before they were able to buy a two-bedroom apartment in Washington with a coveted parking space.

“We are very happy,” Molleda said.

But between the start of their housing search in October and the signing in February, the rates started to climb and quickly.

They were at 3.5% at the start of the search, but “then every house we looked at went up a bit,” Molleda said.

This means that their monthly mortgage payments will be much higher than expected.

Rising prices and high rates have already begun to cool sales and increase the inventory of available homes, reducing pressure on the market.

Prices are only expected to rise 5% this year, much less than last year’s nearly 17% jump, said Lawrence Yun, chief economist at the National Association of Realtors.

Always hot

But that won’t help the shortage, Brent said.

“We’re at such a shortfall now, there’s no way inventory will get back to a healthy level. And so we’re going to continue to see prices go up,” she said, warning the surge will beyond the pandemic and could last another decade.

Yun notes that many builders went bankrupt following the 2008 global financial crisis, which tightened supply.

While he expects conditions to improve in the Washington area, some markets will still see strong demand.

“Affordable areas with strong job growth will remain in vogue, along with areas where wealthy retirees are settling as cash buyers,” he said, including Atlanta, Georgia, San Antonio, Texas and the State of Florida.


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