For more than a year, people all over the United States have been hungry for homes. So hungry, in fact, that it’s become quite common for prospective homebuyers to engage in an all-out bidding wars over the same piece of real estate. Of course, having multiple bidders on the same house only drives up the sales price. While this is great for the seller, it’s not so wonderful for the buyer. And, as a result, many buyers have paid way more than they hoped to pay – or had their offer refused. The good news? While the housing market is still hot from a historical perspective, it seems to be cooling a tad.
With this, buyers who’ve had an offer refused or been reluctant to go house hunting have new incentive to get back in the game. Up next are three signs the market is cooling just a bit, and what they mean for you.
Competition is declining
As mentioned, the housing market has been so hot in recent times that it’s led to bidding wars among numerous potential buyers. Some signs suggest the competition for houses is beginning to wane ever so slightly, however. For example, about 60% of Redfin’s clients faced competition from at least one other buyer when they made a home offer in July. This percentage dipped from 66.5% in June. While 60% is still historically high, it’s a far cry from the nearly 75% competition rate homebuyers faced in April. If things continue along this path in the months ahead, bidding wars won’t be so prevalent, and you’ll have a better chance of getting the home you want for your family and your future.
Inventory is rising
According to the National Association of Realtors’ Existing-Home Sales Report, the inventory of unsold homes in the U.S. increased 7.3% to 1.32 million from June to July. This is equal to 2.6 months of supply at the current monthly sales pace. “We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” said Lawrence Yun, the NAR’s chief economist. “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.” If inventory continues to go up, the competition for houses will steadily trend downward. And this will only help you, the homebuyer..
Home prices are slipping
Nothing is more important when it comes to buying a home than how much the home actually costs. After all, the higher the price tag, the bigger the loan you’ll need and the more you’ll ultimately have to pay back. Thankfully, for buyers, the median price of existing home sales dropped $3,400 from June to July. While this is hardly a quantum slippage, it’s significant nevertheless because it marks the first month-to-month decrease since January. However, median home prices remain elevated year-to-year, as July was the 113th consecutive month of year-over-year price gains.
Ready to start looking for a home? We’re always ready to help you. Contact us today, and we’ll get you started with a quick mortgage pre-approval that is all but a must-have in this still-competitive housing market. With interest rates still relatively low, now is also a terrific time to refinance your mortgage and lower your monthly payments. We look forward to hearing from you very soon!