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We saw this back in the Spring and now, according to realtor.com, at least, the best time to buy a home this Fall will be October 1-7when you will save more than $15,000 compared with the summer peak of %445,000.
Again, according to realtor.com, there will be 17% more homes for sale (both new listings and homes already on the market).
So, if you have a house in mind, maybe the time to act is (almost) now.
With mortgage rates still above 7% – and not expected to drop anytime soon – and home prices continuing to inch upward while inventory remains low, home buyers can’t seem to catch a break.
Fortunately, there’s been an uptick in new-home construction which accounted for nearly one-third of all homes for sale in July. Typically, new homes account for 10% to 15% of the housing market.
Additionally, the cost of a new home and and the resale market is only a $30,000 price difference (median price for a new home, $436,700 and $406,700 for an existing home).
The news isn’t staggering but at least it offers a glimmer of hope: for the second straight week mortgage rates fell slightly to 7.12%, down from 7.23% two weeks earlier. On the other hand, new home listings declined 8.5% from a year ago.
While current homeowners are reluctant to put their homes on the market due to high mortgage rates, new home construction continues an upwards trend, offering buyers some hope.
With mortgage rates now above the 7% threshold, the number of homes for sale in August dropped 7.9% compared with August 2022. To put matters in even more perspective, the pre-pandemic years of 2017-2019 had almsot tewice as many homes for sale.
Conventional wisdom says that current homeowners are reluctant to put their houses for sale when their new mortgage rates will more than double in their new home.
Most analysts don;t see a dramatic change in this narrative for the remainder of 2023.
We’ve heard how new construction is down due to a lack of skilled labor, high material costs, red tape etc. But there are a number of metro areas where permits have been filed and new construction is being planned in:
Not the best news for homebuyers: mortgage rates rose to 7.23%; median listing prices increased by 1.1%; new listings dropped by 5.7%; and the average time on market for a listed home increased by 4 days.
So what’s the good news? While the average time on the market increased – for the 57th week in a row year over year – this increase is less than in 2022.
The hope is that Fall 2023 will see more movement.
As of August 22, 2023, the average 30-year fixed mortgage interest rate stood at 7.62%, up from 7.51% just a week before.
The hope is that as inflation continues to slow down and eventually decline, the Fed will stop raising rates and – hopefully – cut them.
Certainly, the rest of 2023 is going to be volatile but Fanny Mae is expecting the average 3–year fixed mortgage rate to be around 6.6% at the end of the year.
Last week we looked at areas where home listings had fallen the most.
Now we’ll see areas where the number of homes for sale has increased the most:
