Published date:October 12, 2023
Last updated date:October 12, 2023
Are you in the market for a new home? If so, you might want to take a closer look at the upcoming fall season. According to a recent report by Zillow economist Jeff Tucker, there's a "sweet spot" emerging in the US housing market that could benefit homebuyers. Here's what you need to know:
Tucker's report highlights a promising trend for potential homebuyers. He notes that there are currently more motivated sellers and active listings on the market than at any time since last December. In fact, Zillow estimates that approximately 10% of home listings saw a price cut in the week ending September 16 — the highest percentage since November.
While home prices have been on the rise in the past year due to higher mortgage rates, Zillow's analysis suggests that it's still a good time to buy, especially if you have the budget. The key takeaway here is that a larger proportion of sellers are willing to negotiate on their asking prices. It's not just about affordability; potential homebuyers also have a wider range of options to choose from.
Tucker explains, "For determined buyers, with enough budget room to accommodate the recent jump in mortgage rates, this fall is looking more and more like a sweet spot: There are more motivated sellers and more active listings overall than any time since last December, improving buyers' chance to find the right fit."
US home sales have experienced a slowdown as houses have become less affordable due to rising prices, driven by an inventory shortage and high mortgage rates. In fact, the average 30-year fixed mortgage rate recently hit a 23-year high of 7.31%. The high rate of price cuts this fall could be attributed to a combination of factors, such as buyers scaling back, sellers setting overly ambitious list prices, or a mix of both.
The increase in new listings in August, compared to July, is seen as a positive sign. The number of listings had been declining since July of the previous year, so the uptick in August suggests that the worst of the "listings drought" may be over.
When you consider the surge in home listings in August and the slightly weaker demand from homebuyers, it appears that more inventory is becoming available for potential buyers.
While the current market conditions may be favorable for buyers, it's important to acknowledge the challenges they still face. Mortgage repayments have surged as a result of higher home prices, with the typical monthly mortgage payment reaching $1,896 in August — an 18% increase from the previous year. Over the past three years, the monthly repayment for a mortgage, including principal and interest, has risen by a substantial 122%.
The US housing market is showing signs of a "sweet spot" for homebuyers this fall, with more motivated sellers and increased listings. While higher mortgage rates remain a challenge, those with the budget and determination may find excellent opportunities in the market. As the housing market continues to evolve, staying informed and working with a knowledgeable real estate agent can help you make the most of this unique moment.
The value of the US housing market has also seen significant growth, surging about 50% from pre-pandemic levels in January 2020 to nearly $52 trillion today, according to Zillow's recent report. This growth reflects the dynamic nature of the real estate market and its potential for those looking to invest in their future homes.
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