Is the Housing Market on a Sugar High?

Americans are rushing to buy homes right now, but should you be one of them?

Much has been made about consumers desiring to leave the crowded metros during the pandemic for less crowds and more space in the suburbs and beyond. But there is also a movement of buyers seeking lifestyle and taking advantage of buying in the big cities like Manhattan, where selling prices have declined slightly and properties are taking longer to sell.

To a large extent, the bumper demand for housing is an indication that Americans are aiming to make up for lost time. Many economists believe that what we’re seeing now is essentially a postponed spring home-buying season.

“The housing market is on a sugar high brought on by government stimulus and a pandemic-fueled rush to low density housing,” said Daren Blomquist, vice president of market economics at Auction.com, a real-estate website for foreclosure sales.

“Prospective buyers will be better positioned for success as homeowners if they understand that this sugar high will not last and make sure their decision to buy is grounded in longer term factors that will affect their ability and willingness to commit to paying down a sizable amount of debt over the next 30 years,” Blomquist added.

But even with home-sales activity reaching record levels, many Americans remain unsure of whether now is the right time to make the biggest financial decision of most people’s lives. The home purchase sentiment index from Fannie Mae decreased in July, as people’s view of home-buying conditions worsened in tandem with rising coronavirus cases across much of the country.

Here are the factors that experts say you need to consider:

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