In recent weeks, mortgage rates have dropped from the 23-year peak of 8% to nearly 7%. While some experts predict potential price declines next year, the current home prices remain stable or even show signs of increase due to the limited availability of homes for sale.
According to Danielle Hale, Chief Economist at Realtor.com, housing inventory levels have decreased by about 40% compared to pre-pandemic levels.
However, the latest market data suggests that the market might be undergoing changes, presenting some positive indicators for both buyers and sellers.
Home prices may be starting to slow down, and the decrease in mortgage rates, along with other positive signs, is easing the situation for some. Although home construction typically slows down around this time of the year, recent data shows a 1.8% growth in new home inventory in the last week of September compared to the previous week.
Zillow has also noted an increase in the number of listings, with Jeff Tucker, Senior Economist at the company, stating, "Seller enthusiasm and listing activity are higher overall since December of last year."
Moreover, more sellers are lowering home prices. According to Redfin data, 6.5% of homes for sale in the United States saw price drops in the past four weeks, while new listings increased by 5.2% compared to the same period last year.
Pending sales data for different cities indicates a year-over-year increase in homes for sale in San Jose, California (14.2%), Columbus, Ohio (4.2%), and Las Vegas (1.2%). In terms of new listings, San Jose saw a 25.6% year-over-year increase, followed by Phoenix (20.8%) and West Palm Beach, Florida (18.5%).
A survey revealed that about 10% of U.S. home sellers are considering moving, primarily due to changes in company office policies.
Furthermore, according to a survey by the Kastle building access tracking system, as more people return to traditional office hours, average office attendance rates in major U.S. cities like New York and San Francisco are slightly higher than the pre-pandemic level of 50%.
Although some experts predict significant price declines, limited housing supply persists due to high-interest rates locking in homeowners.
Tom Barkin, President of the Federal Reserve Bank of Richmond, stated, "If you have a 3% mortgage, you're not in a hurry to sell that house and get a 7% mortgage. It just changes the financial formula. So, what you're seeing is still very limited for-sale inventory."
Despite this, buyers and sellers may both experience positive changes in the market in the near future. For prospective buyers who have been waiting for the right opportunity, now may be an ideal time to enter the market.
It's important to note that the real estate market is a complex market influenced by various factors, making it challenging to accurately predict future trends. If you have specific homebuying needs, it's advisable to consult with a professional real estate agent or financial advisor for more accurate information and guidance.
