The red-hot housing market is coming to an end, and many home sellers are hurrying to find a buyer before the demand dries up. According to the Redfin Demand Index, home tours and other homebuying activities fell 8% year over year during the week ended May 15. Despite less competition for homes on the market, home sellers still find it hard to get a buyer.
Home sellers are in a hurry to find a buyer before demand weakens
Despite the current low interest rates, home sellers are increasingly anxious to sell their properties before demand weakens. According to the Redfin demand index, which measures housing requests, the number of homes for sale fell 8% in April from a year ago. This decline is consistent with weak demand for homes throughout the country. The housing market is in a state of’short sale’ – sellers are in a hurry to find a buyer before the demand for their homes weakens.
Rising mortgage rates may have affected the housing market by removing potential buyers. Rising mortgage rates should slow down the rise in home prices, but the market is still too hot to gauge the effect of this change. Whether or not this is a good time to buy a home depends on how much space you have to offer before the price of your home drops. However, you should avoid rushing into a purchase if you do not know how to take advantage of rising mortgage rates.
Home sellers worry that the red-hot housing market is over
While home sales are still brisk, there’s a growing concern among home sellers that the housing market is cooling off. Rising mortgage rates and a slowdown in new home sales are both contributing to the slowdown. While Zillow estimates that home prices will rise by 24% by 2021, many other experts are predicting a much smaller increase. Still, the red-hot housing market is far from over.
The National Association of Realtors, which tracks the housing market, predicts that 30-year fixed mortgage rates will rise again to 3.5 percent by the end of next year. That’s up from 2.78 percent in late July. Meanwhile, the association estimates that inflation will average 2.7 percent over the next year. Though housing prices could remain hot for some time, experts agree that there’s a chance that prices could drop dramatically.
Home sellers are seeing less competition from buyers
While there’s still a lot of competition, there’s less of it than six months ago. Recent data from Redfin, which tracks home buying activity, show that demand for home tours is falling. The index is down 8% year over year during the week ended May 15.
Rising rates have dampened demand nationwide and reduced competition. Fewer people are applying for mortgages and beginning online home searches. A growing percentage of sellers is lowering their prices after listing their homes. As a real estate agent, I’ve had buyers who’ve been frustrated with the slow market and gave up, only to be disappointed again when conditions improved. While conditions are improving nationwide, McCann does not expect much change in the Philadelphia area in the next few months.