Colorful houses

How To Buy a Home Amid Record High Prices

Values Soaring

The red-hot US housing market set another record last month, with the national median sales price exceeding $400,000 for the first time ever. According to the National Association of Realtors, that’s a 26.5% increase from 2020. Market observers report it’s caused some prospective buyers to abandon the idea of owning a home altogether, at least temporarily.

Economists say this has been reflected in the form of falling demand, especially as mortgage rates have risen in recent months. The broader price increase has also been driven by millennials’ demand for more expensive properties in the suburbs.

Prices Steady Despite Rising Rates

The average 30-year mortgage is at its highest level since 2019, according to Freddie Mac data. This limits some buyers’ ability to purchase a home given the added monthly cost, all while many face difficulties covering existing payments, such as student loans. As rates have risen, the weekly number of mortgage applications has fallen.

Despite the decreased demand for mortgages, home prices appear unlikely to decline in the short term. Online real-estate marketplace Zillow says housing inventory is extremely low and won’t get back to pre-pandemic levels until 2024. At the same time, inflation has pushed wages higher, meaning more buyers can afford the higher home prices.

Tips and Tricks

When trying to overcome the obstacles homebuyers face right now, there are a few tips to consider. One is to pay close attention to how long homes have been on the market. In some cases, the longer a property remains for sale, the more willing a seller is to consider offers. Get to know the average number of days homes remain on the market in your area.

The bottom line is that whoever is willing to pay more will typically carry the day in any bidding war. Still, there are other ways to help secure a deal, like being flexible with the closing date. Getting pre-approved for a mortgage is another great step, as it can help your offer stand out from the others. Rising rates are a new wrinkle for the tight housing market, but prices are holding strong, meaning buyers need all the advantages they can get.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

James Flippin ABOUT James Flippin James Flippin is the son of a financial advisor who grew up hearing and learning about bond yields, interest rates, the stock market, and the ins and outs of Wall Street. After stints as a licensing and business broker for Marcus and Millichap in New York City, James moved into broadcasting and became a reporter and anchor. He covered crime, politics, finance, and tech at NBC News Radio while working part-time as a producer for SiriusXM. James graduated from the University of Delaware with a bachelor’s degree in political science and economics. He's also an accomplished podcaster with over 10-years of experience.

TLS 1.2 Encrypted
Equal Housing Lender