America’s housing market has been brutal for homebuyers over the past two years – but signs are finally suggesting the worst may be over.
“How’s the housing market this week?” In our weekly column, we provide the latest stats on the big four of the housing market: home prices, number of new listings, total days on the market and mortgage rates. And for the week ending August 6, these key variables suggest the tables are turning in favor of homebuyers rather than sellers.
“The housing market is once again moving in a buyer-friendly direction,” notes Realtor.com® Chief Economist Danielle Hale in his analysis.
Admittedly, a “buyer-friendly orientation” does the trick no This puts us close to a pure buyer’s market. The seller’s market that has raged since the COVID-19 pandemic is still going strong, but all signs are that the clock is ticking and its days are numbered.
It is also essential information to help both home buyers and sellers stay current in today’s highly dynamic real estate world.
Weekly housing trends.
Surprisingly good news hidden in rising property prices
The latest July data from Realtor.com put the nationwide average home price at $449,000. And for the week ended August 6, list prices increased 15.5 percent compared to the same week last year.
While this is the 34th straight week of double-digit price growth, the good news lurking in the bad is that it’s also the “second straight week of bearishness,” Hale explains.
House prices rose 16.6% in the week ended July 23, followed by a 15.6% increase in the week ended July 30. So this week’s relatively modest 15.5% gain is likely to keep house price growth low.
“The improvement was significant,” says Hale. However, she cautions that “buyers in today’s market may still face significant affordability issues as typical home prices remain near record highs.”
However, the sticker shock isn’t stopping the truly determined apartment seekers from moving on.
“strong [homebuyers] Nevertheless, one can continue to achieve success, says Hale. “Data for the second quarter showed that the homeownership rate increased year-over-year overall and for almost every age and racial and ethnic group.”
The fact that massive inflation, rising mortgage rates, and homeownership rates — among other constraints — have actually risen is evidence that determined homebuyers who are hanging on are eventually winning out. This is especially true if they are willing to expand their house hunting into more remote areas where they imagined they could (or wanted) to live before the pandemic, places where homeowners could live. Being a boss is not that difficult and making a living from it.
Hale says, “One factor in the success of home shoppers is an incredibly strong labor market, which is driving up wages and giving workers the opportunity to negotiate remote or hybrid work arrangements, even as in-person work becomes more common.” With flexible working arrangements still available, home buyers may consider office apartments in more affordable suburbs or even in a newer, less expensive state, at the expense of We are implementing our personal plan to deal with this.”
It’s a true testament to how far homebuyers today are willing to go — that is, as long as sellers are willing to meet them halfway.
How home sellers are undermining today’s “buyer-friendly” market
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Of course, what’s good for homebuyers is bad for homesellers — many of whom are nervous they missed the market peak and are postponing their sales plans.
In the week ended July 30, new registrations in the market fell by 8% year-on-year.
“A year ago, new listings started coming in week four,” says Hale. “It’s increasingly looking like sellers could be cautious given the current market conditions, which have changed significantly, although quite cheap for sellers who have owned almost all of the time.”
And while overall listings (both new and old listings) grew 28% compared to the same week last year, “the number of active listings still lags behind 2020 and 2019 levels by more than 15% and 45%, respectively ‘ Hale says. “Further improvement in active inventory is needed to strike the balance, but the recent trend could be at risk if homeowners’ sales prospects continue to deteriorate now.”
And as home sellers continue to pull out of the market, home buyers will have fewer properties to buy and could be pulled back into the crazy seller’s market they’ve just encountered.
Why homebuyers are in no hurry to close the deal
In July, the listing stayed on the market just 34 days before the snapshot — almost half as long as two years ago. Yet now that we’ve stepped into the lazy August days, homebuyers have long been hitting the brakes and feeling not so quick.
In the week ended August 6, real estate spent three extra days on the market compared to a year ago, marking the second straight week of recession.
“We expect a further slowdown as the housing market resets,” predicts Hale.
Mortgage rates hiked
According to Freddie Mac, the average mortgage rate for 30-year mortgages rose to 5.22% in the week ended August 11, a sharp increase from 4.99% the previous week.
What the future holds will depend on whether rumors of an impending recession prompt companies to lay off workers.
“The big question for consumers is whether companies will become more responsive to recession concerns and start cutting wage bills,” said Senior Economist at Realtor.com George Ratju In a recent analysis. “A sharp drop in hiring could have a direct impact on people’s ability to spend, especially with today’s high inflation.”
In other words, homebuyers want to take full advantage of this buyer-friendly market while it lasts.
See: Is buying a house getting more expensive? Another rate hike has roiled buyers
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