Submitted by AhkoRevari t3_xtr54g in personalfinance
Please forgive my ignorance on this topic, Im trying to learn more and understand the current state of the market and the decisions people are making.
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Many homes cost upwards of 50% more than they did a year ago, and interest rates on mortgages have gone up from what...3% ish at the end of 2020 to now 7%+?
Who is actually buying a home right now? I was getting ready to buy around around the start of this year and decided to hold off seeing where the market ended up, but Im just so astounded as Im still seeing homes bought regularly by individual consumers.
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Some context - my significant others step mother just recently sold a home for 340k. She bought this same home in 2017 for "under 200k" according to her. They put up a for sale sign on this property and it was sold within a week, apparently they were flooded with inquiries about buying this house.
Inflation plays a part considering the value of the home now compared to 5 years ago of course, as does the area the home is in, etc...but Im at such a loss to understand why people would want to buy homes like this so badly where the market is currently. I can also respect that some people need a home and renting may not be a viable option for one reason or another, but is it really a viable option to so clearly overspend on a house right now?
Also, for clarity, they are living in this home with no intention of flipping (according to them).
Edit: also worth noting these are not cash buyers
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edit 2: Apologies, I can see how not including the area is damaging to the integrity of the conversation. This is in Tampa, FL.