The super-hot seller’s market may be shifting toward buyers right now.
The last three to four months have been difficult for buyers hoping to jump into the housing market. Demand for homes has been incredibly high, but there are few homes available. This has meant buyers are having a tough time finding homes, and it’s been even harder to beat the fierce competition and secure a sale. It hasn’t been uncommon to see anywhere from 10 to 30 or more offers on properties, and needless to say, buyers are getting frustrated.
Fortunately, I have some good news. A few things have happened recently that have been contributing to the economy. First of all, most people have received their stimulus checks. More and more businesses are also beginning to open up, and many are thriving. Interest rates have crept up a little bit, but this is usually indicative of a return to normalcy.
In our last video, we talked about key indicators of the housing market. One was inventory, which is still historically low. The other is interest rates, which have risen from around 2.75% to around 3.25%; keep in mind that every time rates increase by 0.5%, affordability decreases by about 6%. We believe interest rates will be around 4% by the end of the year.
“There’s a light at the end of the tunnel, buyers, but it comes at the cost of affordability.”
Historically, we’ve seen inventory rise in April, May, June, and July. With interest rates also rising, it should begin taking longer for listings to sell. With these factors combined, we should see more available inventory, which should give buyers more opportunities and options to find a home.
The main takeaway for buyers is that relief is coming in the next month or two, and the hot seller’s market may end within the next four to six months. It’s not going to shift to a buyer’s market, though—it’s just going to be more reasonable than what we’ve been seeing. Homes won’t appreciate by 1% to 2% each month; instead, they’ll appreciate around 4% to 6% year over year.
There’s a light at the end of the tunnel, buyers, but it comes at the cost of affordability. Still, you’ll see that more options appear and better opportunities become available in the coming months. If you have any questions or would like more information, feel free to reach out to me. I look forward to hearing from you soon.