Housing Market Is Making A Turn for The Best for Buyers

 According to Realtor.com, inventory rose to 31% in July making it a peak in three straight months.  This means there are tons more homes for buyers to pick from.

“The U.S. housing market continues to move toward more evenly balanced supply and demand compared to the 2021 frenzy,” Danielle Hale, Realtor.com’s chief economist said.

She goes on to explain that the rise in mortgage rates caused buyers to tighten their spending budget.  It has caused sellers to reduce their listing price.  Although there are more options, the rise in inventory is because most home buyers cannot afford what is out there.  As of August 4^th, the 30-year fixed rate averaged 4.99%.  Freddie Mac said this was down from the prior week but still up .77% from the same week a year ago.

Realtor.com also reported a decline in new listings in July showing a shift in many sellers’ plans to list.  Sellers are still in a good position as homes that are priced right are selling very quickly. The recent spike in home prices has also cushioned my homeowner’s equity so they can be a bit more flexible with their listing price.  According to the New York Federal Reserve Bank, the median expected increase in home prices dropped to 3.5% from 4.4% in June and 6% in January.

Bad news Fannie Mae’s Home Purchasing Sentiment Index dropped 2 point to 62.8 which is the lowest level since 2011.  The survey point out that only 1 of every 6 consumers (17%) surveyed said that it’s a good time to buy a home and for sellers, 67% believe it is a good time to sell.

“The Sentiment Index has declined steadily for much of the year, as higher mortgage rates continue to take a toll on housing affordability,” Doug Duncan, Fannie Mae’s chief economist, said in a statement.

To be sure, “with home-price growth slowing, and projected to slow further, we believe consumer reaction to current housing conditions is likely to be increasingly mixed,” Duncan said.

“Some homeowners may opt to list their homes sooner to take advantage of perceived high prices, while some potential homebuyers may choose to postpone their purchase decision, believing that home prices may drop.”

 

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