Why Now Is A Perfect Time To Sell Your House
Want even more evidence that inflation is making a comeback in the U.S. economy?
Then look no further than the escalating cost of living the American dream of home ownership.
Average home prices jumped a whopping 7.6% year-over-year in the month of April to a median price of $302,200. And “bidding wars” are back for the first time since the days of the housing boom in 2006, according to a recent Bloomberg article.
In fact, home sellers are receiving a record 98.8% of the asking price!
There are two main reasons for the new American housing boom. First, a relatively tight supply of available listings is playing a role.
But the main reason for the home buying scramble is because the cost of financing the American dream is going through the roof, as you can see in the chart above.
The average rate for a 30-year mortgage jumped to 4.61% last week, the most expensive home loan rate in seven years!
That’s due mainly to skyrocketing Treasury bond yields. The interest rates on 30-Year U.S. Treasuries hit 3.25% last week. This up from 2.6% six months ago.
That translates into much higher monthly mortgage payments for Americans. In fact, the monthly cost on a $300,000, 30-year loan is up over a hundred bucks since January, to $1,540 today. This up from $1,424 at the beginning of this year.
And that helps explain the sudden pickup in home sales. Prospective buyers are rushing to close and lock in mortgage loans before borrowing costs go up even more.
The data is solid evidence of a strong economy to be sure. But, it’s also a sure sign that inflation is back in a big way.
Here’s to growing your wealth,
Chief Income Expert, Mike Burnick’s Wealth Watch