Did you know that June is Home Ownership Month? Now is a great time to celebrate the benefits that homeownership can bring to families, neighborhoods, and communities across America. But this year, with our current housing market landscape, Home Ownership Month looks a little different. Here’s why:
Most Americans want their own home.
First, let’s look at why many Americans like the idea of having their own home. Homeownership is still very much thought of as a part of the American dream. Nearly two-thirds of millennials and 45% of Gen Z say a desire to be a homeowner is the main reason they buy a home. The idea of building equity through owning a home as opposed to helping someone else financially by paying them to rent is still alive today. Many people choose homeownership because it is a part of our cultural mindset and economy.
Are we in a housing bubble?
It is increasingly evident that COVID-19 and the new work from home standards are driving demand for homes. This situation is increasing home prices across the United States. There is an increasing concern from consumers that there is a housing bubble and speculation about when this bubble will burst. Some interesting statistics on the hot housing market right now:
Google recently reported that the search “When is the housing market going to crash?” had spiked 2,450% in the past month.
More than half of this year’s first-time homebuyers expect some competition, while one in five believe they’re in for a lot of competition.
Homebuyers today are purchasing for many reasons: low interest rates, more flexibility to work from home, a lower house payment versus rent payment, fear of missing out on low-interest mortgage rate loans.
Experts say don’t panic as not all bubbles are like the one that occurred in 2008. While the housing market is experiencing low inventory, high demand, and a risk-averse lending environment, the extreme spikes in home prices now could result in home prices returning to normal soon. If you have any questions about saving for a down payment or are curious if your retirement assets can be used for a down payment on a new mortgage, your financial professional can provide you with these answers.
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