Home shoppers may find there’s good reason to breathe a sigh of relief this summer, according to the real estate brokerage Redfin. They pointed to higher inventories, fewer bidding wars, and slowing home prices as welcoming signs for home buyers this year.
In particular, home buyers this summer are finding:
- More options: Inventories of existing-homes are 6 percent higher than year-ago levels—currently representing a 5.6-month supply at the current sales pace, according to May housing data from the National Association of REALTORS®. The higher inventory levels of homes for-sale means that buyers have more choices this summer.
- Less competition: As inventories rise, buyers also are facing fewer bidding wars. Bidding wars are down by double-digit margins in many markets this year, according to Redfin, which conducts anannual bidding war report. In March, 63.4 percent of offers written by Redfin agents across 19 markets faced competition from other buyers, down from a bidding war peak of 73.4 percent a year prior, according to Redfin’s report.
- Price rises are slowing: The median existing-home price for all housing types in May was $213,400—a 5.1 percent rise above May 2013, NAR reports. Home prices rose by double-digits last year. In 2013, home prices rose 11.5 percent over 2012, according to NAR. “Home buyers are benefiting from slower price growth due to the much-needed, rising inventory levels seen since the beginning of the year,” Lawrence Yun, NAR’s chief economist.
- Low borrowing costs: Mortgage rates are averaging about 4.1 percent, less than half the historical average of a 30-year fixed-rate mortgage, which is 8.7 percent, Redfin reports. “For a $500,000 house, this is worth more than $500 a month in mortgage payments,” savings, Redfin notes on its blog.
Source: “4 Reasons Why Homebuyers Can Breathe a Sigh of Relief,” Redfin blog (June 27, 2014)