The median price of a single-family existing home dipped 2.4% to $402,600 from a year ago and was down 0.2% from the previous quarter. “Home sales were down due to higher mortgage rates and limited inventory,” said NAR chief economist Lawrence Yun. “Affordability challenges are easing due to moderating and, in some cases, falling home … [Read more…]
After years of competitive bidding wars and rising prices, a new study from Zillow shows it might finally be a good time to buy a home in many U.S. markets.
Zillow researchers looked at three factors to determine which of the largest U.S. housing markets are becoming more buyer-friendly and found that some previously prohibitively competitive markets – including Seattle and Las Vegas – have turned into the best places for buyers this winter.
The three buyer-boosting metrics Zillow considered are:
- An increase in the share of listings with a price cut. Price cuts indicate homes are sitting on the market longer – which means more options for buyers, less competition for homes and more room for buyers to negotiate. Many recently white-hot markets have seen large jumps in the share of for-sale listings with a price cut.
- Projected increase in rent appreciation over the next year. Rent appreciation has slowed recently, but as mortgage affordability deteriorates due to rising mortgage rates, rents could begin to increase again as some would-be buyers put their buying plans on hold. We know that nearly half of renters consider buying while they’re looking for a home,i and the potential of rising rents also factors in to when it’s a good time to buy.
- Affordability relative to the past. We looked for markets where mortgage affordability is poor – but not worse than it was historically. With interest rates on the rise, and mortgage affordability already closing in on its historic norm, prepared buyers may want to enter the market before housing payments become historically unaffordable.
Based on those factors, Zillow found that the cities of Orlando, Boston, Seattle, Las Vegas, Charlotte, Columbus, Portland, Sacramento, Minneapolis and Dallas were the top ten markets for buyers this winter.
“The housing market always lets up a little in the fall, when kids are back in school and the home shopping season wraps up for the holidays,” said Zillow Senior Economist Aaron Terrazas.
“But this fall and winter are shaping up to be more favorable for those buyers who have struggled to get into the housing market for several years amid red-hot competition. Mortgage rates are rising, but will climb much further in 2019 and early 2020. As purchase affordability deteriorates, expect rents to pick back up as some would-be buyers put their plans on ice. Renters who were thinking of buying and decided to hold off may want to take another look this winter, as a steady clip of mortgage rate increases chips away at affordability and more homes become available on the market.”