Competition in the housing market is easing faster than normal. Home prices ticked lower last month and inventory loosened up, according to Zillow.
Home values fell by 0.1% in September from August. Even a small monthly decline is unusual for this time of year notes Zillow. Nearly a fourth of home listings in September saw a price cut, higher than previous years.
“Mortgage rates approaching 8% are taking the wind out of the market’s sails, pushing monthly mortgage payments beyond many buyers’ budgets,” said Jeff Tucker, Zillow senior economist. “While attractive listings are still moving at a brisk clip, competition among buyers is fading quickly due to the shock of mortgage rates on top of normal autumn seasonality.”
The data come after other signs pointed to improvements in housing inventory and an uptick in sellers lowering their asking price.
Mortgage rates at 22-year highs have shoved many homebuyers — and sellers — onto the sidelines. Nobody wants to give up the low rates they secured earlier.
This “rate lock,” however, might be abating, the Zillow report stated. Sellers may not be able to afford a delay any longer.
As a result, total listings rose by 0.2% on the month. And while new listings dropped 6%, but it’s not nearly as steep as the 13% average decline that was seen in 2018 and 2019.
Separate data from Redfin showed new listings of US homes for sale have ticked up 2% since the start of September, as the typical summer-to-fall seasonal weakness didn’t materialize.
And the Mortgage Bankers Association said this week that mortgage rate applications inched upwards too.
While mortgage rates inch upward, you may wish to consider entering the housing market as prices ease and inventory increases. As we near the 2024 elections many speculate that mortgage rates will drop, creating another rush to buy, which, in turn will cause prices to climb. If you enter the market now, you can always refinance when those rates drop! Get in touch with your real estate professional to explore your options.
Thanks to Aruni Soni, a markets fellow for Markets Insider, for this article. She recently graduated from Columbia University with a degree in economics. She has previously worked at the Boston Globe, Bloomberg Law and Investigate Midwest.