The Notion of Buying a Home Turned Americans off

 (What are you writing about/ what is the main point) Homebuyers in the USA have faced an

unpredictable market due to the lack of available housing inventory and higher mortgage rates

during the COVID-19 epidemic.  (Reason: why; explain) The scarcity of existing and new homes

creates high demand, which drives up property prices.  While home prices have risen practically

nationwide, households’ incomes have decreased.  As a result, many potential buyers are

unable to purchase a property. (Example: from a reliable source) As reported by Fortune.com,

Zillow economists estimated that in January, there were little over 923,000 homes for sale in the

United States, which was down 40.5% from the pre-pandemic level in January 2020 and down

19.5% from January 2021 (Lambert,2022).  (Another example) Another illustration that can be

used to highlight the problem is, according to Whitehouse.com, Freddie Mac researchers

discovered the current housing shortage is close to 3.8 million units, up from 2.5 million in 2018.

In addition, the Case-Shiller Index estimated that home prices in the U.S. climbed by 7 to 19

percent per month between September 2020 and June 2021 (Bernstein et al., 2021).  The other

important issue is the higher mortgage rates that are making the prospect of owning a home for

Americans far more expensive. Many buyers are eager to find the right property before interest

rates rise even higher, but there are only a few available for purchase because many of the

homes are still under construction. Even some purchasers keep themselves out of the market

because of the high mortgage rates. This puts downward pressure on home demand. As

claimed by Noradarealestate.com, the average rate for a 30-year fixed mortgage was 3.99

percent as of February 11th, 2022, up 15 basis points from the previous week. While the

average rate on a 30-year fixed mortgage was 3.51 percent a month ago, the average rate on a

15-year fixed mortgage is now 3.33 percent, up 10 basis points from the previous week.

(Santarelli, 2022). Surprisingly, homebuyers will experience higher monthly costs because of
rising prices and borrowing rates, and the property market will remain competitive for

purchasers in 2022.

Americans have soured on the prospect of buying a home

The thought of purchasing a home has soured among Americans.

The Notion of Buying a Home Turned Americans Off

Homebuyers in the USA confront an unpredictable market in recent times due to the lack of
available housing inventory and the higher mortgage rate during the Covid-19 epidemic. The
scarcity of existing and new homes creates high demand, which drives up property prices. In
addition, while home prices rise practically nationwide, households’ income decreases. As a
result, many would-be buyers are unable to purchase a property.
As reported by Fortune.com, the Zillow economists estimated that there were just over
923,000 U.S. homes listed for sale in January which was down 40.5% from the pre-
pandemic level in January 2020, and down 19.5% from January 2021(Lambert,2022). In
addition, according to Whitehouse.com, the Freddie Mac researchers observed that the
current housing shortfall is close to 3.8 million units, up from 2.5 million in 2018; and the Case-
Shiller Index found, from September 2020 to June 2021 national home prices grew by 7 to 19
percent per month (Bernstein et al., 2021).
Another important consideration for this situation is the higher mortgage rates that are making
the prospect of owning a home much more expensive for Americans. Many buyers are eager to
find the appropriate home before rates increase further higher, but relatively few homes are
available for sale because they are yet under construction. Even some purchasers keep
themselves out of the market because of the high mortgage rates and put downward pressure
on home demand. As reported by Marketwatch.com, according to Freddie Mac FMCC, +0.57
percent, the 30-year fixed-rate mortgage averaged 3.69 percent for the week ending February
10, up 14 basis points from the previous week. It also mentioned that a new study from Fannie
Mae FNMA, +0.93 percent, only 25% of respondents say now is a good time to buy a home,
which is a new low since the mortgage giant started recording the data. Meanwhile, 69% of
respondents believe now is an excellent time to sell a property (Passy,2022).
As reported by Case-Shiller Index,from September 2020 to June 2021 national home prices
grew by 7 to 19 percent per month. In 2020, home prices surpassed income growth, resulting in
the greatest national price to income ratio since 2006. In addition, according to the Freddie Mac
researchers, the current housing shortfall is close to 3.8 million units, up from 2.5 million in
2018. According to Zillow Economists, home values in the United States are expected to rise
16.4 percent  between December 2021 and December 2022. In January, there were just over
9,23000 properties for sale in the United States, that is 40.5 percent decrease from pre-
pandemic level in January 2020 and 19.5 % decrease from January 2021.

Which do you like more?

USA Today (Miller and Rosenblum, 2020) recently published data
about the rising rental trends in young adults. In the article “Renting
to Ownership No More” the authors state that more an 28% of young
people stay in rentals more than 15 years, compared to 8 years of
renting just 20 years ago.
Or
According to the USA Today, more an 28% of young people stay in
rentals more than 15 years, compared to 8 years of renting just 20
years ago (Miller and Rosenblum, 2020).

During the Covid epidemic, property values virtually doubled across the country,
while household income plummeted.
As a result, many would-be buyers were unable to purchase a property.
Home prices have risen practically everywhere throughout the Covid epidemic,
while household income has decreased.
As a result, many would-be homebuyers have been priced out of the market.

Homebuyers confront 'an abnormal' market for yet another year

For yet another year, homebuyers face an "abnormal" market.
# Too little inventory for sale, lofty price, and now rising mortgage rates
have created a trifecta of obstacles for homebuyers.
Homebuyers face a trifecta of challenges due to a lack of available inventory, high
prices, and now rising mortgage rates.
Homebuyers are facing a trifecta of challenges: a scarcity of available inventory,
high prices, and now rising mortgage rates.
# The issue is the low supply of available existing and new homes feeding
high demand that continues to drive home prices up.
* The issue is a lack of both existing and new homes, which is feeding high
demand and driving up property prices.
* The problem is that there is a scarcity of existing and new homes to meet
rising demand, which is driving up property prices.

# During the Covid pandemic, home prices have shot up nearly nationwide

while household income fell.

As a result, homeownership became out of reach for many would-be buyers.

During the Covid epidemic, property values virtually doubled across the country,
while household income plummeted.
As a result, many would-be buyers were unable to purchase a property.
Home prices have risen practically everywhere throughout the Covid epidemic,
while household income has decreased.
As a result, many would-be homebuyers have been priced out of the market.
# Surging mortgage rates are making the prospect of buying a home even more
expensive for Americans — many of whom have already grown weary about
the state of the housing market.

Soaring mortgage rates are making the prospect of owning a home much more
expensive for Americans, many of whom are already dissatisfied with the housing
market's situation.
# As Americans consider the prospect of higher rates, some are attempting to
take action — but finding major obstacles lie in their path. “Real-estate markets
are caught in a lopsided dynamic with many buyers eager to find the right
home before rates rise even higher, but very few available homes for sale as a
result of almost a decade and a half of underbuilding,” said George Ratiu,
manager of economic research at Realtor.com.

According to Ratiu, the housing shortage has surpassed 5.8 million homes as of
the end of 2021. “With millennials and Gen Z forming households at faster
rates, new home construction would have to triple the rate of home
completions to close the gap in five to six years,” he said.

As Americans ponder the likelihood of rising rates, some are seeking to act – but
are encountering enormous roadblocks. "Real-estate markets are trapped in a
lopsided dynamic," said George Ratiu, manager of economic analysis at
Realtor.com, "with many buyers eager to find the appropriate home before rates
increase further higher, but relatively few available homes for sale as a result of
almost a decade and a half of underbuilding."
Ratiu estimates that the housing shortfall will reach 5.8 million dwellings by the
end of 2021. "To close the gap in five to six years, new home construction would
have to triple the rate of home completions," he added, noting that millennials
and Gen Z are creating families at a faster rate.
As the potential of rising rates looms, some Americans are seeking to act – but are
encountering significant roadblocks. "Real-estate markets are caught in a lopsided
dynamic," said George Ratiu, manager of economic research at Realtor.com.
"Many buyers are eager to find the right home before rates rise even higher, but
there are very few available homes for sale as a result of almost a decade and a
half of underbuilding."
Ratiu estimates that by the end of 2021, the housing shortfall will have reached
5.8 million households. "To close the gap in five to six years, new home
construction would have to triple the rate of home completions," he said, adding
that millennials and Gen Z are creating families at a faster rate.

#Why Are Interest Rates Important to the Housing

Market?
Interest rates are important to the housing market for several reasons. They
determine how much we will have to pay to borrow money to buy a property, and
they influence the value of real estate. Low interest rates tend to increase
demand for property, driving up prices, while high interest rates generally do the
opposite.

The housing market is influenced by interest rates for a variety of reasons. They
influence the value of real estate by determining how much we will have to pay
to borrow money to buy a home. Low interest rates tend to promote property
demand, driving up prices, whilst high interest rates have the reverse effect.

# Trends and conditions in the housing market also affect mortgage rates. When fewer
homes are being built or offered for resale, the decline in home purchasing leads to a
decline in the demand for mortgages and pushes interest rates downward.

Mortgage rates are influenced by housing market trends and conditions. When
fewer homes are built or offered for sales, there is less demand for mortgages,
which causes interest rates to fall.

#The monetary policy pursued by the Federal Reserve Bank is one of the most

important factors influencing both the economy generally and interest rates specifically,
including mortgage rates.

The Federal Reserve does not set the specific interest rates in the mortgage market.
However, its actions in establishing the Fed Funds rate and adjusting the money supply
upward or downward have a significant impact on the interest rates available to the
borrowing public.1 Generally, increases in the money supply put downward pressure on
rates while tightening the money supply pushes rates upward.
* The Federal Reserve Bank's monetary policy is one of the most important variables
impacting the economy in general and interest rates in particular, including mortgage
rates.

In the mortgage market, the Federal Reserve does not set precise interest rates. Its
actions in setting the Fed Funds rate and shifting the money supply higher or
downward, on the other hand, have a major impact on the interest rates available to the
borrowing public. 1 In general, expanding the money supply drives rates lower, while
limiting the money supply pushes rates higher.

* The Federal Reserve Bank's monetary policy is a major influence on both the
economy and interest rates, especially mortgage rates.

In the mortgage market, the Federal Reserve does not control interest rates. However,
the Fed's activities in setting the Fed Funds rate and shifting the money supply upward
or lower have a considerable impact on the interest rates accessible to borrowers. 1
Rates are often pushed downward by increases in the money supply, while rates are
pushed upward by restricting the money supply.