The median monthly housing payment remains near record highs, but slowing price growth, declining mortgage rates and a pileup of supply is giving homebuyers in certain parts of the country room to negotiate.
The median U.S. home-sale price rose 3.7% year over year during the four weeks ending February 16, the smallest increase since September. Additionally, the weekly average mortgage rate dipped to 6.87%, its lowest level of the year.
While typical monthly housing costs remain near record highs, decelerating price growth and gradually declining rates are among several small pieces of good news for house hunters this week. Here are the others:
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- Homebuyers have more total inventory to choose from. There are five months of supply on the market, up from 4.1 months a year earlier and the most since early 2019 (except the 4 weeks ending January 26, when there were 5.1 months). Supply is piling up because listings are rising while pending home sales are falling.
- Buyers have more new inventory to choose from, too. New listings are up 4.2% year over year to their highest level for any comparable time period in three years.
- Buyers have more negotiating power. The typical home is selling for 2% less than its asking price, the biggest discount in two years. Additionally, the typical home that sells is taking 57 days to go under contract, the longest span in five years. A slow market in which the typical home is selling under list price means buyers in many markets have the opportunity to negotiate on prices and terms.
Some markets are more buyer friendly than others. For example, the coastal Florida market is tilting in buyers’ favor, while sellers are generally in the driver’s seat in some West Coast and Northeast markets. Additionally, these conditions may be short-lived as more buyers come off the sidelines. Home-touring activity is rising, according to both ShowingTime data and Google data, and DHC agents in certain areas report that house hunters are gearing up for spring homebuying season.
“If a home needs work or it’s priced too high, it’s sitting on the market,” said Hennin Foreman, DHC Group agent in San Diego. “That’s when a buyer has bargaining power. But updated homes that are priced right–especially those located in desirable neighborhoods with highly rated schools–are selling quickly, sometimes for tens of thousands of dollars over the asking price. It seems like every buyer is looking for the same type of house.”
Bottom Line
With the cost of homeownership so high in Southern California, making the right decision about buying or selling a home can feel like a real challenge. Whether you're downsizing, upsizing, investing or cashing out all together...if you’re open to having the right team put in the work for you, we can get it done.
Hennin Foreman and The DHC Group can help you explore what’s possible and present pain free options that can work for you.
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