Unpacking how buyers and sellers should respond to this changing market.
The real estate market saw a big shift from last month. Let’s compare some statistics and find out what’s going on.
There were 24,452 homes on the market this month compared to 14,800 last year. That’s an increase of 65.2% in available homes. 9,301 homes came on the market this month compared to 10,571 last year—a 12% decrease. 6,451 homes sold this month compared to 9,383 homes last year—a 32% decrease. The monthly supply of inventory went from 1.58 months last year to 3.79 months this year—a 239% increase.
Higher interest rates are causing this. At the beginning of the year, interest rates were around 3%. Now they’re at 7%. A 4% jump means a buyer’s purchasing power has dropped 40%. If a buyer wants to keep the same payment they’d have had at the beginning of the year, they need to adjust their price down 40% to keep the same payment. What does that do to housing prices? Many home prices are coming down lately. Over 4,100 homes every week are reducing their price.
Although inventory hasn’t grown much in the last 30 days, we are seeing more homes cancel and come off the market as sellers aren’t willing to come down to the prices necessary for a buyer to purchase their home. This is a great buying opportunity for buyers. You can now negotiate a great deal for yourself. Although rates are high, you can always refinance in the future if rates come down.
One concern we have for our market right now is that the federal funds rate was raised by 0.75%. Rates are going up, and prices are coming down. So if you want to know how to navigate this market, give me a call at (602) 738-9943 or send an email to firstname.lastname@example.org and let’s talk. I look forward to hearing from you soon.