Buyers appear to be gaining more leverage in the housing market following years of almost total control being in the hands of sellers.
There are signs of a softer market emerging. Recent research by Redfin shows there are fewer people searching for “homes for sale” on Google than in previous weeks, while home viewing activity down slightly and mortgage purchase applications are down 14% compared to a year earlier. And even though it’s not that common, some sellers have reportedly been forced to drop their asking prices to sell their homes.
At the same time, home inventories are reportedly improving slights. According to data from realtor.com, active inventory last month rose by 8% compared to a year ago, the first time it has done so by that much in almost three years. That suggests homeowners who’ve been thinking about selling are now looking to do so before any slowdown in the market.
For now though, sellers still have the edge as competition for homes remains tight. Fifty-four percent of homes that went under contract had an accepted offer within the first two weeks of being listed, Redfin reported recently. Thirty-nine percent of homes went under contract within one week of hitting the market.
Home prices are still high. The median national home price climbed to an all-time high in May, reaching $447,000, realtor.com reported.
Aspiring buyers are expressing greater concerns over prices. Fannie Mae’s home purchase sentiment index showed that 79% of respondents reported that it’s a bad time to buy a home, a new survey high. Affordability is the main reason for their concern, the survey found.Mortgage rates and home prices have climbed, pushing on buyers’ budgets.
“The sudden surge in mortgage rates led to a sudden and significant cool down in the housing market in May,” said Chen Zao, the lead of Redfin’s economics research team. “However, mortgage rates are now stabilizing and homes remain in short supply, so while we do expect home price growth rates to decline, we don’t expect prices to fall much at a national level. For home buyers trying to determine the best timing this year, the main benefit of waiting is that there may be less competition as supply starts to build up.”