High Rents, Limited Inventory and Low Interest Rates Encourage People to Search for a Home
High rent prices are driving people to buy their first home. A Redfin survey reports that one in four homebuyers confirm that they decided to purchase a home because rent is becoming unaffordable. This number is up from November’s report, which came in at one in five. Last August, one in eight homebuyers verified that they bought a home for this reason.

Is Competition Causing a Problem?

Since more homebuyers are entering the market, inventory is taking a dive. The survey showed that recent homebuyers are concerned about the number of homes that are available. Fewer homes increase competition, limit choices and lead to bidding wars. The Redfin survey found that 20 percent of buyers were worried about inventory. This number has grown by four percentage points over last quarter.

Rising Prices

Homebuyers are also predicting price increases. According to the survey, 53 percent of them expect to see higher prices soon. In the last report, 48 percent of home buying respondents felt that way. People are also worried that prices will increase significantly.

Unchanging Interest Rates

After the Federal Reserve raised rates last December, many in the housing market expressed concerns that rates would rise. Since rates appear to be holding steady, homebuyers are confident that they’ll stay there for at least the next six months.

Buying Now Instead of Later

Today, many people are more motivated to buy a home than they were a year ago. Consistently low interest rates combined with a limited housing inventory as well as rising rents are increasing buyer aggression. If you’re waiting to buy a home, it appears that now is a good time to start shopping for one.