Although mortgage rates remain high, the week
of Oct. 1, 2023 is expected to offer
buyers the best overlap of reduced home prices and competition
alongside increased inventory, according to
Realtor.com®.
SANTA
CLARA, Calif., Sept. 13,
2023 /PRNewswire/ -- As mortgage rates hit their
highest peak in more than two decades, Americans determined to make
a home purchase this year are navigating a dauntingly difficult
housing market. With approximately 4.2 million home sales expected
in 2023, Realtor.com® analyzed the numbers in its
fifth annual Best Time to Buy Report, identifying key factors to
consider when buying a home, apart from mortgage rates. According
to the new report: inventory, prices, and competition from other
buyers are in peak alignment across the nation during the week of
Oct. 1, offering homebuyers a window
of opportunity to make the most of their purchase this year.
This early-fall period will offer buyers the most favorable
moment to buy during the remainder of the year, with more home
listings, less competition, and lower prices. This week may
offer:
- Up to 17% more active listings than at the start of the
year.
- Savings of more than $15,000
relative to the summer's peak price of $445,000
- More time to decide as homes are expected to stay on the market
for one week longer than during this year's peak
- Less competition with demand expected to be 18.7% lower than
peak buying periods
"Mortgage rates have been more than 6% since September 2022 and could continue this trend for
another year. Even as prices fell this summer, the monthly payment
to finance a median-priced home was still more than 20% higher than
last year,"1 said Danielle Hale, chief economist,
Realtor.com®. "Mortgage rates continue to be a big wild
card for Americans hoping to buy a home. Our analysis shows that
buying in the fall does give buyers some more predictable
advantages that could potentially ease the pain of higher rates and
other stressful aspects of the home buying process, including
making fast decisions and bidding wars."
Hale added, "For buyers trying to close this fall, saving a
search on Realtor.com® can help them stay up to
date on homes in their price range without the work of having to
refresh or recreate their search."
Since 2018, Realtor.com® has analyzed home prices,
inventory, listing views, and time on market, indicators that tend
to follow regular seasonal patterns, to determine the best time to
buy. Here's how these factors breakdown during this unique
window:
Reduced Prices: Historically, an average of 5.5% of homes
have price reductions during the Best Time to Buy period, which
means roughly 40,000 homes across the U.S. could see price
reductions, based on inventory estimates. During this week, prices
typically dip 3.3%, compared to the typical season high,
translating to $15,000 in savings.
And in several of the largest housing markets around the country,
home prices during the best week to buy can dip more than 10% below
their peak price earlier in the year, potentially saving buyers
tens of thousands of dollars.
Increased Listings To Choose From: This year, inventory
will likely be lower than in years past as hesitant sellers shy
away from the market. However, seasonal inventory trends are still
expected and project 11.7% more active listings for the week of
Oct.1 than the average week of the year, and 17.2% more than the
start of the year.
Less Competition From Other Buyers: Home buyers shopping
during the best week to buy can expect less competition from other
buyers. This year, we saw a return to some pre-pandemic home
shopping trends – with the most views per listing in the spring,
and prospective buyers continuing to explore the housing market
during the summer months – meaning fewer buyers to compete with
this fall. While there may still be more competition than
pre-pandemic, buyers can expect demand to be 18.7% lower than peak
buying periods in 2023, and 13.5% lower than the average week.
A More Manageable Timeline: While homes are still
spending less time on the market than pre-pandemic, the breakneck
pace of the housing market has slowed. During the best time to buy,
buyers can spend more time considering their options rather than
making quick decisions, and sellers may become more flexible as
their listings linger. Historically slowing by 29% compared to the
year's peak pace – homes were on the market for an average of 43
days in June 2023 – buyers can expect
more than one week extra to deliberate in early October.
More Fresh Listings: Despite the count of new listings
having fallen this year as homeowners hesitate to sell amidst
financial concerns tied to record-high mortgage rates, new listing
declines have leveled off. Historically, the best week to buy has
seen the addition of 18.9% more homes than at the start of the
year, and early October is set to offer the highest influx of fresh
listings compared to the remainder of the year.
Methodology:
Realtor.com analyzed six supply and
demand metrics at a national and metropolitan level that follow
seasonal patterns, using data for 2018-2022 period (2020 data was
omitted due to anomalies caused by the pandemic). Those metrics
analyzed include: 1) listing prices, 2) inventory levels, 3) new
"fresh" listings, 4) time on market, 5) homebuyer demand
(realtor.com views per property) and 6) price reductions. Interest
rates, which do not follow seasonal patterns, were not included. To
account for 2022 market conditions, estimates reflect typical
seasonal patterns layered on top of the most recent 2022 weekly
data.
Each week of the year was scored from 0 to 100 based on the
number of active listings. A given week scored highly if it had
more listings compared to other weeks of the year. The other
metrics were scored in the same way, such that each week had six
different scores for active listings, new listings, listing prices,
days on market, price reductions, and views per property. (In the
case of prices, lower prices score higher. Same with views per
property).
Each week was then ranked by the average of those scores. The
week with the highest composite score was considered the best time
to buy. This week represents a balanced view of market conditions
favorable for buyers.
About
Realtor.com®
Realtor.com® is an
open real estate marketplace built for everyone.
Realtor.com® pioneered the world of digital real
estate more than 25 years ago. Today, through its website and
mobile apps, Realtor.com® is a trusted guide for
consumers, empowering more people to find their way home by
breaking down barriers, helping them make the right connections,
and creating confidence through expert insights and guidance. For
professionals, Realtor.com® is a trusted partner
for business growth, offering consumer connections and branding
solutions that help them succeed in today's on-demand world.
Realtor.com® is operated by News Corp [Nasdaq:
NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more
information, visit Realtor.com®.
1 The monthly payment to finance 80%
of a median-priced home was more than 20% higher in July 2023 than it was in July 2022
Media contact: press@realtor.com
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SOURCE Realtor.com