As mortgage interest rates decreased at the beginning of the COVID pandemic, the housing market in many parts of the country heavily favored sellers. More buyers entered the market to secure mortgage loans with low interest rates. And this high buyer demand usually leads to sellers receiving multiple bids for their homes.
While it is generally still a seller market today, the conditions for home selling may be set to change in the near future.
What the Future Indicates for Buyers
Over the past six months, interest rates have been steadily increasing. While rates averaged around 3.05% towards the end of 2021, they have since increased to an average of 5.10% as of May. Even though there are still a high number of potential buyers on the market, the higher interest rates have allowed the market to stabilize somewhat.
Keep in mind that home values rose by upwards of 20% over the course of 2021, which means that buying a home today may be somewhat more expensive than it was just one year ago. If you're set to buy a home, the housing market pivoting away from sellers is highly beneficial.
While home prices may have been lower one year ago, the increased buyer competition in the market made it difficult for many buyers to make bids that were high enough to satisfy the seller. Once demand decreases among buyers, home inventory will increase, which means that you may find it easier to purchase a home without needing to make an offer that's far higher than the listing price.
In general, you should expect demand to still be relatively high and housing inventory to be relatively low. However, both of these metrics have improved in recent months, which means that the market shouldn't be as intense as it was in 2021. Home prices are also expected to rise this year but shouldn't come close to the 20% increase that occurred last year.
What the Future Indicates for Sellers
If you're looking to sell your home but worry that the market may not be favorable for doing so, the truth is that the housing market still favors sellers. The main difference is that there may not be a lengthy bidding war when you list your home on the market. However, sellers still hold ample amounts of negotiating power when an offer is made. If you want to make sure that your home is sold without delay, perform any necessary upgrades and repairs before placing your home on the market.
While it's unlikely that the housing market will shift completely to favoring buyers, it's looking increasingly likely that the market will be more balanced over the next year or so. A balanced and healthy market is great for buyers and sellers alike.
Are you in the market to buy a home? Let the experience of the Tress Team at Keller Williams help. We will provide a free, no-obligation consultation to buyers to begin the process of purchasing your dream home. Get started with your home search at www.TressHomes.com and/or email us at email@example.com.