‘It’s Not the All-Out Feeding Frenzy Seen Earlier.’ Economists and Real Estate Pros on What the Housing Market Will Look Like This Fall
If you’re in the market for a home, here’s some good news. Mortgage rates remain near historic lows: Some 15-year rates are near 2% and some 30-year rates are below 3%, as you can see here. What’s more, buyers looking for a home in fall and winter may have a bit of an easier time than they did this summer, experts say.
Indeed, the frenetic rise of home prices is slowing, though still going up: “September was the second month in a row that month-over-month price appreciation pulled back, signaling that moderation in home proces is around the corner as we come into 2022. Still, it will take some time before we return to a normal level of price growth, and we still expect prices to grow 13.6% by next September,” says Nicole Bachaud, an economist at Zillow.
What’s more, inventory is up: More than 1.1 million homes were for sale in August, up 4.1% from July. And home sales have slowed, according to data from the National Association of Realtors, which reveals that single-family home sales have decreased 3.1% from a year ago. Another factor in buyer’s favor is that fall and soon winter are upon us, and those are two seasons when homes tend to sell for less of a premium than they do in spring and summer months.
What does this mean for home buyers and sellers?
All that said, none of this means big changes for buyers. “Make no mistake, it’s still a very competitive market,” says Bachaud. Adds Greg McBride, chief financial analyst at Bankrate: “There’s been a bit more inventory of homes available for sale to come on the market and things aren’t as frenetic as earlier in the year, but this is still a very hot housing market where demand far exceeds supply in most markets.” That said, you can expect fewer bidding wars, fewer instances of buyers buying sight unseen or waiving inspections.
For sellers, it won’t have a huge impact either. “Sellers won’t see a deluge of offers above asking price, and it might take a little longer to sell, but it’s still very much a seller’s market,” says McBride.
Holden Lewis, home and mortgage expert at NerdWallet, says buyers and sellers are going to have to accept imperfection as they trudge ahead in the current market. “There’s a shortage of appliances, so buyers shouldn’t expect sellers to offer brand new washers and dryers as an incentive. And it’s not easy to find workers and materials for renovations, so houses might not be in tip-top shape when they change hands,” says Lewis.
Is now the time to buy a home?
“Mortgage rates have also stayed stubbornly low, making now a good time to buy and lock in a relatively low payment if a buyer finds a home that fulfills their wish list and that they can afford,” says Bachaud.
That said, it’s important to consider what you can actually afford, and ensure that you’re not buying the wrong house because you get caught up in the real estate frenzy: “Making the biggest financial decision of your life under duress is not a recipe for success,” says McBride.
