There’s been a recent shortage in the number of home sales, and you might be wondering why that is. What does this mean for the future?
I saw some interesting things happening in our local MLS this week. For all those real estate newbies out there, MLS stands for multiple listing service, the website licensed real estate agents use to share home details with other agents. What I saw ignited a faint wonder, is the market starting to shift?
My position has been pretty stout on the current sellers’ market remaining strong, and those waiting for a bust in the trajectory would be waiting much longer than they expected.
Just this week, on “Good Morning America,” I was informed that inflation still hasn’t adjusted properly to halt the increases and it seems like employee pay is also ticking up, which has them concerned consumers will continue to spend money, exasperating the efforts to bring inflation down.
I’m perplexed by all of this. A few years ago, they were trying to stimulate the economy, handing out money so we would go buy things. Now, the strategy is don’t buy because we are going to cause a recession with our spending habits.
So I am thinking, what the heck is going on, and what’s coming next? Will the madness ever stop and is there a special supplement program for those who work in industries our government has decided needs a head-on intervention?
In the United States, if you make between $42,000 and $126,000 per year, you are considered the middle class. The average wage earner is making about $56,000 per year.
When I was learning about life, I was told that you should not spend more than 1 week of pay on your rent or mortgage. If you make $56,000 per year, that would be $1,166 a month.
This week, available home sales inventory ticked up but the number of pending homes is down, as 696 residential homes were recorded as sold over the last 30 days. That’s about half as many homes that were reported as sold the 30 days prior (mid-May – mid-June), 1,467 homes, to be exact.
Is the shortage in sales just a small blurb as people wait to see if prices or interest rates will tick back down? I mean, that 6 percent rate is sounding like a steal right now, with rates hovering near 8 percent.
Currently, in all of the 1,460 homes for sale, 441 of them are priced at $250,000 or less. These are statistically three-bedroom, two-bathroom homes with about 1,400 square feet. And at today’s interest rate, your payment would be about $2,000 a month. You would need to be making $100,000 per year to comfortably pay for one of the most affordably priced homes in our market.
Farming, manufacturing, transportation, and medical/pharmaceutical industries have been notoriously over-governed parts of our economy for decades, forcing much of these trades to move to other countries, pressing our nation to import and not create.
Creating free enterprise is what we as Americans are supposed to do best, but today it feels useless to hope for significant change that actually benefits those who are working hard to keep everything together. I am sure that some entity is benefiting extravagantly from the weight tossed onto the normal wage-earning consumers.
This is why the rental market is increasing so rapidly. For the first time in my nearly 20 years of real estate, it is cheaper to rent than to buy in the CSRA.
Why does this matter? It matters because building long-term wealth is sustained by home ownership. Homeownership is a vital part of the American dream and it feels like it is being attacked from every angle, and I can’t help but take that personally.
Like what you just read? To read more of these thought leader articles from our author, please click here.
