This season comes with unique perks for homebuyers. Here are our top five:
1. Home prices are expected to keep rising.
The inventory shortage of the past few years has driven up housing prices. Right now, there are 22.7 percent fewer listings compared to a year ago.
Chronically low inventory indicates that falling home prices are nowhere in sight:
- According to CoreLogic’s HPI (Home Price Index) Forecast, home prices may increase by 4.5 percent within the next year.
- As home prices inch higher, waiting doesn’t make sense if you want to buy a house and are financially prepared to do it.
A recent Freddie Mac survey shows that 18 percent of people plan to buy a house in the next six months. To put it another way, nearly one in five consumers thinks it’s a good idea to buy a house soon. Close to half of the survey respondents also feel confident in the strength of the housing market.
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2. Buyer demand is moderating.
Whereas spring and summer are typically the busiest buying seasons, fall is when you’ll see less competition among homebuyers.
This means that:
- The summer buyers hoping to move while school is out will have either put their hunt on hold or found a house. Only serious shoppers who need to buy a house will stick around.
- Likewise, sellers may also be more serious. Sellers might hope to close quickly—before the end of the year, often for tax purposes—motivating many to throw in incentives.
Though homes are still receiving multiple offers, you shouldn’t have to worry as much about bidding wars as a fall homebuyer. This can help to decrease stress and conserve your funds. No need to put cash toward an offer over asking price when you could use it for a down payment or closing costs.
3. Mortgage rates may start moderating too.
Mortgage rates have risen from their pandemic lows, due in part to the Federal Reserve’s efforts to control inflation. Housing forecasts suggest that rates have hit their peak and could soon begin declining.
“It’s reasonable to assume that… mortgage rates will retreat in the second half of the year if the Fed takes its foot off the monetary tightening pedal and provides investors with more certainty,” Odeta Kushi, First American Deputy Chief Economist, says.
Although they’ve increased, mortgage rates are still historically low. Current rates reflect a real estate market returning closer to its pre-pandemic levels. If mortgage rates decline, even slightly, this can help to lower your monthly mortgage payment.
4. You could see price cuts.
It’s still a seller’s market—for now. But due to affordability challenges triggered by higher home prices and mortgage rates, sellers in many cities have been forced to cut their prices. Factor in that fall is technically an “off-season” for real estate, and you may see even more seasonal price drops.
Among Realtors, fall is known to be the time of year to lock in a better price on a house. This may be more likely if a home has been sitting on the market. Luxury homebuyers could find the best deals; luxury home prices in cities like Seattle and San Francisco are seeing significant price drops.
5. You can start building your prosperity.
Unless you’re living rent-free, you’re always going to be paying a mortgage. It may be your landlord’s, or it may be your own once you buy a house. The difference is that your monthly mortgage payment goes toward building your own prosperity, instead of helping to build wealth for someone else.
Recently, the average homeowner’s equity reached a record high of nearly $300,000.
While today’s home prices aren’t expected to appreciate at quite the same rate, home values aren’t expected to depreciate. If you buy a house now, you’re still likely to progressively build equity—or your prosperity. This equity can be used to pay down debt, remodel, fund tuition or a small business, or move into a larger house.