Experts say that despite house prices hitting new highs, there are signs that real estate market is becoming better for buyers In some places.
The median cost of an existing single-family home in the United States was $426,900 in June, a record high, according to the agency. National Association of Realtors. NAR found that about 3.89 million homes were sold in June, down 5.4% from May.
although mortgage interest rates That’s down from the peak in May, but borrowing costs remain expensive for buyers. The average 30-year fixed-rate mortgage in the United States rose to 6.78% from 6.77% on Thursday, according to data provided by Freddie Mac through the Federal Reserve.
Despite these headwinds, some indicators suggest the housing market is moving away from a seller’s market.
This doesn’t mean it’s a buyer’s market — Yet: “The term buyer’s market is always a bit difficult to understand,” said Daniel Chen, director of economic research at online real estate brokerage Redfin. There are some “rules of thumb” to define a buyer’s market, such as more than four months supplyshe says.
“The market is definitely tilting more toward buyers, and I would say maybe it’s becoming more balanced,” Zhao said. “Things are getting better, but not great yet.”
Zillow senior economist Orphe Divounguy agrees.
“We’re still in a seller’s market across the country, not a buyer’s market,” he said. “However, there is good news for buyers on the horizon.”
4 signs of a “more neutral market”
Overall, affordability challenges remain. But those buyers who certainly can afford to buy, they “realize that the pendulum is swinging a little bit in their favor,” Diwanji said. “Things are moving towards a more neutral market,” he said.
Here are four signs that can help you identify whether the real estate market in your area is more favorable to buyers:
1. Homes stay on the market longer
Daryl Fairweather, chief economist at Redfin, said that as homes stay on the market longer, buyers may have the opportunity to purchase properties for less than the listing price. Before told CNBC.
About 64.7% of homes listed in June had been on the market for at least 30 days, up from 59.6% a year earlier. according to to Redfern. Homes are staying on the market a little longer because mortgage rates and prices are still generally higher for buyers.
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Divounguy said the home selling period is 46 days, compared with 35 days last year and 19 days in 2021, according to Zillow data. “So homes stay on the market longer.”
2. Buyers are exiting
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In some areas, homebuyers are quitting after completing a home purchase transaction.
About 56,000 home purchase agreements were canceled in June. redfin tuna established. Some of these abandoned deals may have resulted from buyers reconsidering their budgets and needs.
Julie Zubiate, a real estate agent with Redfin Premier in the San Francisco Bay Area, writes in “Buyers Are Getting More Picky” redfin tuna Report. “They’re supportive because of the little things, because the monthly cost of buying a home right now is just too high to justify not putting everything on their must-have list.”
“You really don’t think about insurance and taxes,” said Selma Hepp, chief economist at CoreLogic. “Then you get the first estimate from the lender and you decide to back out.”
3. Seller competition becomes more intense
In other cases, buyers may become more discerning as more listings become available in their area.
At the end of June, the total housing inventory was 1.32 million units, an increase of 3.1% from the previous quarter and an increase of 23.4% from the same period last year. The supply of unsold inventory stood at 4.1 months, up from 3.7 months in May and 3.1 months a year ago. according to To Nar.
Competition is easing fastest in the South, with all major Southern markets except Dallas and Raleigh being either neutral or buyer-friendly, according to June 2024 Zillow Home Market Report.
“As inventory increases, it does mean buyers have more choices, but that’s just regional. And those buyers who have the most inventory increases are facing other issues,” Hupp said.
4. The seller lowers the price
For several years now, home sellers have had the advantage of selling their homes for more than they paid for them, as home valuations have soared and the supply of homes has been chronically low.
“Sellers have to do more to attract buyers,” Dewanji said. “Let’s see One in four sellers is cutting prices — the most June in the past six years — in an attempt to sway buyers.
About one-fifth, or 19.8%, of homes for sale saw price reductions in June, the highest level ever for a June. according to to Redfern. That’s up from 14.4% a year ago.
Homebuilders are also struggling to attract buyers: about 31% are cutting prices to increase home sales, up from 29% in June and 25% in May. according to Survey conducted by National Association of Home Builders, July 2024.
