It seems that housing markets can change at the drop of the hat, without any reason. In reality, a lot of those changes are part of a bigger picture that you may not even realize. It can be affected by things like the changes in the population of the area, the interest rates, the economy, and the real income of the city. It can also see variations with an increase of homelessness, raised prices for homes, and the rise of rent by various landlords. No two areas are the same when it comes to the price of a home. We are going to break down the main reasons why house prices fluctuate to help you understand what to look for in your area.
When you intend to buy a house, you have to be able to pay for it within the time your mortgage states. Your income, whether it be you as an individual, you and your significant other, etc.are taken into account. The more money you have, the more you can spend on the house in general. Income gives room for the price to increase. In the same light, an area where there is less income means the homes aren’t going to be as expensive and smaller in comparison.
“The more money you have, the more you can spend on the house…”
“A larger commitment can deter buyers in an ever changing job market.”
When the unemployment rate increases, that means that more people are jobless. They are financially unable to make larger purchases, one being a home. Also, at times unemployed people shy away from buying a home out of a fear of job loss. A larger commitment can deter buyers in an ever changing job market.
Interest rates are what can skyrocket a mortgage payment, and turn people away from buying a home. They can fluctuate throughout the season, and when they are higher, people feel more comfortable renting a house or an apartment.
“Interest rates are what can skyrocket a mortgage payment…”
“With the recent recession, banks have increased their criteria for people to get a mortgage.”
Because of the fluctuation between the interest rates, and economic growth (or lack thereof), there are times when mortgages aren’t even available. A mortgage is a loan specifically for homes. A bank is lending out their money to you with the expectation that you’ll pay it back within a specific timeframe. With the recent recession, banks have increased their criteria for people to get a mortgage.