This past year has been a rollercoaster of high and lows, of uncertainty and expectation. What started off as a promising year quickly plummeted into confusion and panic at the onset of the COVID-19 pandemic. The US economy dropped drastically in early 2020, and many feared that real estate would soon follow. But in an unforeseen twist, the market has actually skyrocketed—and home values along with it.
Home Values Are Rising—But Will That Continue?
Home values have been on the rise for the past few years. But when the economy crashed in response to the global health crisis, economists and investors alike feared this would be the year the appreciation trend came to a halt. Some even predicted that home values would fall as much as 6%.
However, the housing market has proved to be the only major industry immune to the economic impacts of the pandemic. In fact, home values are expected to increase—and keep increasing—over the next year.
Here’s what else you need to know.
Home prices have risen since the start of the year
The Federal Housing Finance Agency (FHFA) recently release its latest Home Price Index. Surprisingly, the report shows that home values have risen 6.5% from the same time last year. The FHFA also noted that prices accelerated at record levels over the summer months.
Between May and July 2020, national prices increased by over 2%—the largest two-month price increase since 1991 when the index started.
Prices are expected to continue rising
Almost all major national real estate projections forecast pricing gains over the next 12 months—though the rate of increase varies between companies. Zelman, for example, predicts a nearly 6% increase, while CoreLogic calls for only a 0.6% gain. Towards the middle of the field, Fannie Mae and the National Association of Realtors predict values will increase by about 4.4%.
It’s a good time to make a move
Rising home prices are good for both home buyers and home sellers. For sellers, the perk is pretty apparent—the higher the price, the more you’ll make. Additionally, prices are being driven up by a high-demand low-inventory market, which means you may even see a speedy sale.
For buyers, competition can be tough. Prices are high, so you might end up paying more. But on the flip side, mortgage interest rates are hovering near rock-bottom lows, so what you gain in price you’ll make up for in interest savings. And if home values continue to rise, you could see almost instant equity on your home purchase.
Ready to Make a Move in Pittsburgh?
Are you thinking about buying or selling a home in the Pittsburgh area? We’d love to help! Contact the Jim Dolanch Real Estate Team today to learn more about how we can help you achieve your real estate goals—whether you’re searching for homes or ready to list.