Over the past year, US home prices have experienced an increase due to elevated mortgage rates. Nevertheless, Zillow suggests that now is a good time to buy a home, provided you have the financial means.
Zillow’s assessment is grounded in their analysis indicating a greater number of sellers are becoming more flexible with their asking prices, as revealed in a recent report by senior economist Jeff Tucker.
According to the real estate company, during the week ending September 16, 9.2% of home listings experienced a price reduction—the highest share since November. This trend is not solely about price; prospective homebuyers now have a wider array of options.
“For determined buyers with the financial flexibility to accommodate the recent surge in mortgage rates, this autumn is increasingly appearing as an advantageous window. More motivated sellers and a higher volume of listings compared to any time since last December enhance buyers’ prospects of finding the ideal property,” wrote Tucker in the report.
US home sales have decelerated due to the reduced affordability of houses, caused by escalating prices driven by both an inventory shortage and elevated mortgage rates. The average 30-year fixed mortgage rate reached a 23-year peak at 7.31%, according to the most recent data from Freddie Mac.
“The considerable number of price reductions this autumn can be attributed to a combination of factors: buyers exercising caution, sellers setting overly ambitious list prices, or a combination of both,” added Tucker.
The price reductions on listings coincide with an uptick in new listings in August compared to July, a scenario Tucker described as “unusual.” This is noteworthy as the number of listings has been decreasing since July of the previous year, suggesting that the worst of the “listings drought” may be easing.
When these factors are considered together, the surge in home listings in August and decreased demand from homebuyers indicates a growing inventory available for potential buyers.
However, buyers currently have valid reasons to be cautious, especially with the surge in mortgage repayments. Higher home prices have pushed the typical monthly mortgage payment to $1,896 in August—an 18% increase compared to the previous year, according to Zillow. In total, the monthly mortgage payment, including both principal and interest, has surged by an astounding 122% over the past three years.
Zillow reported on Tuesday that the value of the US housing market has surged by approximately 50% since the pre-pandemic days in January 2020, now totaling nearly $52 trillion.
If you think it is a good time to buy for you and are ready to buy, contact us today. We have North Central Florida data we can share to make your home buying experience an informed one.