Wednesday, September 1, 2021

Will the Fall Bring a Cooler Housing Market?


The National Association of Realtors says the housing market is hinting at cooling off this fall. This doesn't mean the market still will not be viable, it just will not be as hot as we have seen in the first half of 2021.

"There has been a turn in the market from superheated to still very strong," said Lawrence Yun, NAR's chief economist.

High home prices have detoured many from purchasing but this scenario is improving a little according to Yun. Unsold homes increased 7.3% from June 2021 to July 2021 and unsold inventory is up at a 2.6 month supply at the current sales pace. There is a balanced market currently at around a 6 month supply of homes.

"We see inventory beginning to tick up, which will lessen the intensity of multiple offers," said Yun. "Much of the home sales growth is still occurring in the upper-end markets, while the mid-to lower-tier areas aren't seeing as much growth because there are still too few starter homes available."

As of July 2021, the median home price for existing homes was up 17.8% from a year ago to $359,900. The year-over-year gains have increased for the past 113 months in a row. Cash purchases have remained strong with all-cash sales making up 23% of home sale transactions in July. This was up 16% from July 2020. Low mortgage rates are still helping the current market and homebuyers.

"Despite the ongoing challenges of today's housing market, including limited inventory, lightning-fast home sales and competition from investors with deep pockets, many buyers are finding ways to persist until they find and close on a home," said Danielle Hale, Realtor.com chief economist.

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