In Los Angeles and other parts of California, it is not uncommon for home sellers to receive several offers from buyers. This is partially because there are fewer homes available on the market. Higher mortgage rates could make it even harder to find an affordable home in markets throughout the country. The interest rate on a 30-year fixed loan has climbed to 4.42 percent from 3.95 percent at the start of 2018.
Those who are looking for their first homes could find that it’s even more difficult to find something that they can afford. This is because starter homes are increasing in price while also becoming more difficult to find. The increase in interest rates can also mean that a mortgage costs tens of thousands of dollars more in finance charges. Therefore, many buyers in markets like Los Angeles won’t be able to afford a home in today’s market even if they make the median wage for the city.
Furthermore, the cost of homes is rising faster than wages in many parts of the country. In 2018, the median price of a home was 3.8 times the median wage. In 2000, however, the median price of a home was only 3.3 times the median income. Rising prices and lower inventory could signal that home sales will remain flat or only slightly increase in 2018.
Individuals who are looking to buy residential property may benefit from partnering with an attorney. In some cases, individuals will be required to have an attorney review their purchase agreements or their mortgage contracts. Furthermore, legal counsel could make sure that there are no title or zoning issues that might make it difficult to acquire a property or use it to its full potential.