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It’s been a brutal couple of years for people looking to buy a house. Since 2021, mortgage rates have more than doubled to the high 6% range, while prices have continued to rise. It’s been the perfect storm for a prohibitively expensive market with very little to choose from. Buying the typical home with a mortgage now means signing up for a monthly housing payment of $2,820, just shy of the record high. But this spring, signs emerged that the tide was starting to turn. Although mortgage rates haven’t budged, homeowners are more willing to sell. The combo of persistently reluctant buyers + newly motivated sellers = more wiggle room to negotiate. Experts say that even if it’s not officially a buyer’s market, it’s certainly a more balanced one. “The power dynamic is moving more and more from sellers to buyers,” Lance Lambert, co-founder of the real estate publication ResiClub, recently told Fox Business. Here are a few signs pointing to the shift:• Buyers have more choices, which is giving them more bargaining power. As of April, sellers outnumber buyers 1.94 million to 1.45 million, according to Redfin estimates. That’s the widest margin ever recorded by the real estate brokerage, whose records date back to 2013.
• Prices are still rising, but the pace continues to slow. Previously owned homes sold for a median price of $422,800 in May, data from the National Association of Realtors showed. That’s up just 1.3% from a year earlier — the smallest increase since 2023, when there was a brief decline in prices. Economists at Redfin are now expecting prices to fall 1% by the fourth quarter of this year, marking the first major shift from the seller’s market that began in 2012 and was turbocharged by the pandemic buying boom.
• Sellers are already lowering their expectations. Redfin data showed that only 28.5% of homes sold above asking price in the four weeks through June 8, the smallest percentage for this time of year since 2020. So what? If you’re looking to buy a home, there’s reason to feel more optimistic. Not only do you have more options, but you might be able to negotiate a better deal, especially when a property has been for sale for a while. Sellers, on the other hand, should be careful not to overprice their listings, according to Realtor.com. If it languishes on the market for too long, it could become a red flag for buyers. Sellers usually become buyers, though. So there’s potentially something in the shifting market for everyone.
Related Reading
Pandemic-Era Homebuyers Are Now Selling Into a Completely Different Market (Yahoo Finance) Home Sellers Are Dropping Prices, but Buyers Aren’t Budging. What Could Change That. (Barron’s via MSN) Homebuyers and Sellers Say Agents' Cuts Are Too Big. Flat-Fee Brokers Offer an Alternative (NPR)Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
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