The four weeks ending on February 23 saw the smallest year-over-year increase in the median home sale price in the United States since September. And mortgage rates have declined to their lowest level in more than two months, dipping from 7.13% to 6.78% in the last two weeks alone and upping buyers’ purchasing power by thousands of dollars. Mortgage rates are coming down due to signals that the U.S. economy is slowing, and heightened recession fears.
Another factor is working in buyers’ favor in addition to some cost relief. House hunters have a bit more power to negotiate on sale price and terms as supply piles up in some parts of the country. There are 4.6 months of supply on the market, up from 4 months at this time last year, and the typical home is selling for roughly 2% less than its asking price.
There are signs that slowing price growth, declining rates and more favorable conditions are bringing some house hunters back to the market. A seasonally adjusted measure of tours and other buying services provided by Redfin agents, the Homebuyer Demand Index from Redfin has reached its highest level since the beginning of the year, and nationwide Google searches for “homes for sale” have reached their highest level since September.
But home sales have yet to improve. Pending home sales are down 6.2% from a year earlier, in line with decreases we’ve seen since the start of the year. Even though mortgage rates have declined a bit, the typical monthly housing payment is just $32 shy of its all-time high. Sales could pick up in the coming weeks if the increase in home tours turns into more offers and/or mortgage rates continue coming down slightly.
don’t wait until the flowers start to bloom if you want to buy a house in the next six months. As we get closer to spring, the market will get hotter.” Now is the time to potentially negotiate down the price of a home, save money on closing costs or get the sellers to cover issues uncovered in the inspection. Homes under $400,000 and upscale, fully renovated homes in sought-after neighborhoods are the subject of bidding wars. But buyers are looking online and going on tours for everything in between, but they aren’t buying them. Deals are being made available to the jumping buyers.
