Much of the research about home prices is conducted by firms that sell real estate. That makes sense, since they have a financial incentive to know exactly what’s happening with sellers and buyers.
While their research is often accurate, their conclusions can be a little…optimistic. After all, they’re in the business of selling homes, so they need to spin the bad news to convince Americans to buy.
That explains, for instance, this headline from Redfin, an online real estate firm: “The Number of U.S. Homebuyers Just Dropped to a Record Low, Shifting the Market Further in Buyers’ Favor.”
Redfin’s latest research found there were 51.3% more home sellers than buyers in July. As it explained…
When sellers outnumber buyers, buyers typically have more negotiating power because they have options. That’s why a market with a lot more sellers than buyers is considered a buyer’s market.
Problem is, it’s only a buyer’s market for those who can afford to buy. As I wrote last month, the national median sale price rose to $401,000 – up 1.5% from a year earlier. And mortgage rates are also rising.
Meanwhile, Redfin’s online competitor Zillow issued its own research this month under this headline: “Rents near $2,000, rising at the fastest pace in over a year.”
That’s bad news for the Americans I deal with as a housing counselor trying to help them save for a new home. But Zillow spins it this way: If rents are going up, might as well buy a home! With us!
Otherwise, the rental news is dismal. Zillow says the “typical U.S. asking rent” rose to $1,962 in July – up 2.3% from last year. And here’s some bad news for both renters and buyers…
A household needs $78,488 in annual income to afford the typical U.S. rental, compared to nearly $99,800 to afford a typical mortgage payment – a gap of more than $21,000 that has widened significantly as home prices and mortgage rates have climbed.
Unlike Redfin and Zillow, I don’t spin the bad news. But I do agree with both firms on one thing: I also want folks to buy new homes. It’s good for their quality of life and their bottom line. Of course, I want homebuying to be responsible and sensible.
Thankfully, that’s what housing counseling does. For free.
Consolidated Credit’s Housing Counseling Services partner with the U.S. Department of Housing and Urban Development, better known as HUD. We offer a free First-Time Homebuyers Workshop, free Foreclosure Prevention Counseling, and even counseling for renters.
Best of all, unlike real estate agents, you don’t pay us a commission. Check us out if you have questions. Did I mention it’s free?
