The summer months are ramping up, and the housing market continues to be weaker in many aspects. The median value of houses in May-June increased by 0.9 percent per year, according to several real estate analysts; however, a variety of other indicators in the market could be faster or more hopeful. In the past inventory growth has slowed over the past three months, and there is a lower number of potential buyers eager to sell their homes. In the meantime, those homes that become available for sale have a longer wait for buyers than they did earlier in the year. Let’s take a closer review of the current trends in the housing market (agents everywhere are starting to scramble for new MLS listings).
Updates On The Housing Market In Big-Picture Terms
Recent inflation data show a level that is 4.9 percent, as per the Consumer Price Index (CPI) published in June. That is a substantial reduction from 6.4 percent at the beginning of the year. However, it’s still above the goal of the Federal Reserve of 2. Housing remains among the most significant factors in the rise in inflation all-around, and the index for shelter has risen by 8.1 percent over the last twelve months.
In addition, in the meantime, the Fed has been able to continue a pattern of increasing interest rates to limit the rate of inflation. In its last meeting in May, the Fed raised rates for the tenth time in a row. In the end, mortgage interest rates remain relatively high territory. While there’s been talk about rates rising being over, it has yet to be seen which decision the Fed is likely to make during its upcoming meetings, scheduled for mid-to-end-of June.
The high-interest rate creates challenging conditions for buyers, and sellers’ markets are naturally cooling. However, a housing crash still doesn’t seem likely. Things are indeed changing and course correcting a bit; however, it’s not a major change. This market differs from the bubble in 2008 for several reasons, including much tighter lending criteria than in 2008.
Monthly Market Data For The Housing Industry
- Sales at home: Existing-home sales fell 3.4 percent from month to month between March and April 2023 for an annual average of 4.28 million, as per National Association of Realtors (NAR) information. However, compared to the previous year, it is more significant, falling 23.2 percent.
- Median price: The nationwide median home cost for April was $388,800, the third month of declines year-over-year after a lengthy period of growth.
- Home Price Index: However, the most recent Case-Shiller U.S. National Home Price NSA Index published on May 30 reported that the housing market was experiencing an increase for the second time in two months. The growth in home prices climbed 1.3 percent in March 2023. That’s an improvement from February’s modest 0.2 percent gain.
- Rates for mortgages: According to Bankrate’s national survey of lenders with large amounts, the median mortgage rate for a 30-year mortgage is 6.91 percent (as of June 1).
The Market For Real Estate Housing Sellers
Although the latter half of spring and summer are typically the busiest seasons for the real estate market, this year’s housing market has yet to conform to the pattern. NAR information from the May mid-point shows that sales for existing homes are declining in the four central regions of the nation, month-over-month, and year-over. The West is still experiencing the most considerable market drop, with sales dropping over 30 percent from the previous year. Yet, these regions have the highest medians, with prices of $578,200 and $422.700, respectively. The median for the South stands at $357,900. The Midwest’s median is at $287,300.
A few of the regions where the prices have dropped most rapidly are those that were quite expensive in the first place. For San Francisco, for example. Redfin reports that the median sales price fell 17.8 percent in April last year. Even with the double-digit drop, however, the median price remains a record-breaking $1.325 million.
Should you decide to sell your home now or put off selling now or wait for the market to change to your advantage? Obviously, it depends on your personal and financial situation, but the great news is that the buyer’s need is still much more than inventory. In the United States, there is only a 2.9-month supply of stock, according to NAR, and it is well less than the 5 – six months required to have a balanced market. At the very least, sellers are at the helm for the current.
The Housing Market For Buyers
The mortgage interest rates are still high and can limit your buying potential as a purchaser. In addition, there is a need for more inventory across many areas. A lack of inventory sometimes leads to difficult conditions for potential buyers. Many of them are awaiting the outcome in the sand for the moment.
A bright side is that prices in several popular markets have been decreasing when compared with earlier in the year. In Seattle, as an example, prices have dropped by around 9 percent per year, according to Redfin. That’s a thirteen percent decrease for Denver, eight percent for Las Vegas, and 5.4 percent for San Diego.
Another element that works to the advantage of buyers is a term used to describe days on the market (also known as the length of time homes remain in the marketplace before they are sold. According to NAR, The average property during April spent an average of 22 days in the marketplace. It was 17 more days than the same time last year. The number of days can differ between cities; however, the longer a home remains on the market, the more likely it may be willing to bargain on price to get an agreement.
Next steps
If you’re planning to enter the world of real estate this summer or fall, consider conducting your own market study. Market dynamics are complicated and rapidly changing and can vary greatly depending on the region. Sellers must ensure that they are aware of how much their home is worth in the current market conditions -buyers must do the math to determine precisely the amount of house they can manage to pay for. Pre-approval for mortgages is also an excellent idea for buyers to understand the value a lender is willing to pay. No matter which side you’re dealing with, collaborating with a seasoned real estate agent in your area will help you navigate the market more efficiently.
