The housing market is rapidly changing from the peak frenzy it saw over the past two years. That means you probably have questions about what your best move is if you’re thinking of buying or selling this fall.
Surging mortgage rates are once again pushing homes into unaffordable territory for homebuyers, and it’s making the process of pricing a home even more complicated.
Nationally, the monthly payment required to finance the purchase of a typical home rose from $2,210 in August to $2,547 in September — a 15 percent rise in only a few weeks — as mortgage rates shot back up to 6.7 percent, according to a report on September 29, 2022 from Redfin.
This means when homesellers and their agents look at recent sales of comparable properties, they risk falling into unusual pitfalls. Unless a home is a clear cut above its comps in the neighborhood, the seller may need to consider that buyers won’t find it as affordable as some recently sold homes in the same area. Across the country asking prices have actually ticked upward in September, even as affordability worsened for buyers. But at the same time, more sellers have also been forced to drop their asking prices.
Still, sellers have yet to completely lose their grip on the market. The traditional definition of a balanced market is six months of inventory, with anything lower than that considered to favor sellers. In that same four-week span, the supply of homes was back up to three months of inventory as the pace of sales continued to slow. For most of the pandemic, there had been only two months of inventory available at a time.
To help you make a confident decision, lean on the professionals for insights. Here are a few things experts are saying about the fall housing market.
Expert Quotes for Fall Homebuyers
A recent article from realtor.com:“This fall, a more moderate pace of home selling, more listings to choose from, and softening price growth will provide some breathing room for buyers searching for a home during what is typically the best time to buy a home.”
Michael Lane, VP and General Manager, ShowingTime:“Buyers will continue to see less competition for homes and have more time to tour homes they like and consider their options.”
Expert Quotes for Fall SellersSelma Hepp, Interim Lead of the Office of the Chief Economist, CoreLogic: “. . . record equity continues to provide fuel for housing demand, particularly if households are relocating to more affordable areas.”
Danielle Hale, Chief Economist, realtor.com: “For homeowners deciding whether to make a move this year, remember that listing prices – while lower than a few months ago – remain higher than in prior years, so you’re still likely to find opportunities to cash-in on record-high levels of equity, particularly if you’ve owned your home for a longer period of time.”
Locally in the Twin Cities, Showing data (the number of buyers scheduling private home showings) shows that there are fewer buyers out there looking at homes but activity is still relatively strong. Many agents are reporting that buyers are starting to have sticker shock when they reconnect with their lender and find out that rising rates are eroding their purchasing power. For many buyers, this has put an end to their search. For other buyers, this makes them more discerning about what they are willing to buy.
Mortgage rates, home prices, and the supply of homes for sale are top of mind for buyers and sellers today. And if you want the latest information for our area, let’s connect today.
Schedule some time with Sarah Marrinan, owner of Call Sarah First, Inc at E&V, Click to contact.