(WHTM) — The housing market has been hot over the past year, but are things finally starting to cool?
“With the mortgage rates rising, some would-be buyers are essentially getting priced out,” said Lawrence Yun, chief economist for the National Association of Realtors. He says mortgage rates are higher now, and home prices are also up.
“In Harrisburg, the price rising 14% in the first quarter compared to one year before, these are solid gains for homeowners, but for renters who would like to buy, it’s becoming an increasing challenge,” Yun said.
The median price of a home in the Midstate is $215,000. That’s up from $150,000 just two years ago. Nationwide, home sales are starting to decline, but the Midstate is still a seller’s market. This is a very attractive place to live, especially for people moving from bigger cities.
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“So say someone from Washington, D.C. or Philadelphia or New York seeking affordability, certainly Harrisburg provides that very nice opportunity to buy even though for longtime local residents it may seem to be expensive,” Yun explained.
With more people working from home, it’s a lot easier to move to Central Pennsylvania and save money. That is adding to an already crowded field of home buyers. On top of that, because of supply chain issues, new homes are being built very slowly, which is increasing demand for existing homes.
Spring is the busiest season to buy a home, but Yun says you may want to wait it out.
“For people who do not want to compete among so many people, waiting — even in late summer some of the demand generally dissipates by then — it may be a better chance for buyers at that point,” Yun said.
To stand out in a competitive market, buyers could consider paying with cash, Yun said. That may not be an option for everyone, though, so other tips include being flexible on a closing date and being willing to compromise.
“One certainly wants to do a home inspection, but don’t be too picky. If one is too picky about it, the home seller says, ‘Look, I have other buyers,'” Yun said.
If you decide to wait to buy a home, you always run the risk of mortgage rates jumping again, but home builders are becoming more active, which means more supply will eventually come to the market.
No matter what you decide, the most important tip is to stay within your budget.