Creating a Rare Chance for Buyers as Sellers Reduce Prices.
The US housing market is beginning to cool off, which may present an excellent opportunity for homebuyers as prices drop, according to Zillow.
Despite the fact that the US housing market normally slows down in the fall, more homes are experiencing price reductions this year than in the past, according to a note published on the real estate listings website on Thursday.
The percentage of property listings that had a price reduction increased to 9.2% in the week ending September 16, surpassing the 7.9% rate for the same time in 2019, according to Zillow, who called it “unusually high” even when taking seasonal changes in the US housing market into account.
- According to Zillow, the US housing market is beginning to cool off, which may present homebuyers with a favorable chance.
- In the week ending September 16, the proportion of house listings that received a price reduction increased to 9.2%.
- That rate is higher than the 7.9% rate for the same time period in 2019 and is “unusually high,” according to Zillow.
A number of factors that have come together to create a slightly more accessible US housing market have triggered that tendency. Due to a lack of inventory, home prices have risen over the past year, but according to Zillow, the supply glut has lessened recently, with new property listings up 4% month over month in August.
Prices have been kept high in part by demand, but pressure from increasing mortgage rates has caused some purchasers to start backing off. According to Freddie Mac data, the average 30-year fixed mortgage rate hit 7.31% last week, which is the highest level in almost 23 years. According to the most recent Mortgage Bankers Association poll, weekly mortgage applications decreased 1.3%.
“This fall is looking more and more like a sweet spot for determined buyers, with enough budget room to accommodate the recent jump in mortgage rates: There are more motivated sellers and more active listings overall than any time since last December, improving buyers’ chance to find the right fit,” said Jeff Tucker, a senior economist at Zillow.
Homebuyers, who have suffered greatly as a result of one of the most expensive real estate markets ever, are partly reassured by the increased affordability.
However, analysts caution that until mortgage rates start to decline, the affordability situation is unlikely to drastically improve. This is definitely not going to happen anytime soon. A Redfin prediction predicts that rates will decrease to just 6% by the end of 2023.
The experts at Zillow, in contrast, had previously predicted home price growth through the first half of 2024, notwithstanding the present slowdown. According to the firm’s research team, home prices could increase by as much as 5% by August 2024.