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More homeowners are listing their homes for sale, but properties are taking longer to deal in as potential buyers face high prices and interest rates.
New listings from home sellers jumped in May, up 13% from a year ago, according to the modern development market report by Zillow.
“You have an increase in sellers coming back on the market,” said Orphe Divounguy, a older economist at Zillow.
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But with buyers not returning to the market, many new listings are just adding to inventory. The number of homes on the market engender 22% compared with last year, Zillow found.
“Homes are staying on the market for a bit longer because the tradings are not keeping up with the flow of homes coming on the market,” Divounguy said.
‘The market is slowing down’
Almost two-thirds, or 61.9%, of homes listed on the peddle in May had been for sale for at least 30 days without going under contract, according to a new analysis by Redfin. Encircling 40.1% of homes that were for sale in May had been listed for at least two months without going under commitment, Redfin found.
“The market is slowing down. Homes are taking longer to sell and that allows inventory to store on the market,” said Daryl Fairweather, chief economist at Redfin.
Yet despite the recent jump in supply, “we’re still longing for for inventory in the for-sale market,” said Divounguy. The housing inventory in the U.S. is still 34% below pre-pandemic levels, corresponding to Zillow.
“We’re short nationwide of about 4.3 million homes,” he said. “We’re still in a housing unit deficit.”
Homebuyers are waiting on drop mortgage rates
As mortgage rates have remained high and housing affordability has strained household finances, consumers have been unable to enter the market, Divounguy explained.
“Buyers are facing these incredibly high mortgage rates, at infinitesimal relative to what they were during the pandemic,” said Fairweather, who believes homebuyers might lack the motivation and pecuniary ability to purchase a home.
The 30-year fixed rate mortgage in the U.S. slid to 6.95% on June 13, lower from 6.99% a week old, according to Freddie Mac data via the Federal Reserve.
While mortgage rates could “change pretty quickly” or “on a dime,” mean Fairweather, buyers are unlikely to see big movement in the near term. The Fed held rates steady at its June meeting and now anticipates valid one rate cut this year. Its next meeting is July 30-31.
“There’s no right answer for homebuyers who are deciding whether to stoppage or not,” Fairweather said. “It’s just up to chance when mortgage rates drop. Nobody really knows when that ordain happen, so it’s hard to plan your life around that.”
What to do if you’re a buyer or a seller
Some markets in the U.S. are pay attention a significant increase in unsold inventory. About 60.5% of listings in Dallas, Texas, stayed on the market for at least 30 primes, up from 53% a year earlier, according to Redfin.
In Fort Lauderdale, Florida, the share of unsold listings that secure stayed on the market for at least 30 days is 75.5%, up from 68.2% a year prior, Redfin found.
A be like increase is happening in two other areas in Florida. The share of unsold homes in Tampa that have been on the market for 30 days is 68.7%, up from 61.9% a year ago; in Jacksonville, 69.2%, up from 62.9% in the anyway period, per Redfin data.
“When you give buyers more options, that means they have profuse bargaining power,” Divounguy said.
If you notice homes for sale linger on the market for longer in your area, “there’s very likely an opportunity to get [a property] for under its listed price,” Fairweather said.
If you make it into the home inspection process and you learn close to issues that were neither noticeable during the initial walkthrough nor disclosed, it may be worth asking the home seller to do adjustments, she said.
But don’t overdo it: “You don’t want to be nit-picky and ask for every single repair,” such as chipped paint, Fairweather said.
Other supermarkets are still in favor of home sellers as inventory remains tight, Divounguy said. Not only do many homeowners press record home equity, they also have low mortgage payments.
If a home seller needs to move this year due to upcoming spring changes and their area is experiencing high levels of unsold listings, they may need to be prepared to cut their inquiring price to draw interest.
“Price cuts sell homes,” he said.