I get asked this question probably more than any other, and right now there are a lot of people asking. Many are not sure what’s going on in the industry, but they see prices are not escalating like they did for the last few years. Many wonder if it is becoming a buyer’s market and whether they should wait. The answer is YES, now is actually a great time to buy.
Let’s look at what is happening in the market to give you an overview:
Pricing: Home prices have definitely leveled off since the first quarter, which is great news for buyers (and we are finally seeing pending home sales rising due to this and interest rates). Year over year, home sales have declined for 11 consecutive months, with slight improvements in sales statistics in February and March. Many industry experts are predicting the market will hit a plateau before the end of the Spring home buying time.
Inventory: While inventory declined since the start of the year, we have seen a small spike in most markets in the last few months, and combined with lower prices and lower interest rates it makes the perfect trifecta for home buyers. This is usually the time of year when we see inventory increases, so moving forward into summer that will most likely be the case.
Interest rates: Rates are back down to very low levels (the lowest since early 2018), in the low 4% range. These rates could change tomorrow if there is positive economic news, although the Feds have indicated they’ll stick around for some time. The drop in interest rates spikes demand, and we should see that continue throughout May. June can be a bit tricky with graduations, vacations and the end of the school year – often these can contribute to a slow selling month and not as much new inventory…but a great time for buyers.
Competition: While there definitely are buyers out there looking to purchase homes, the general feeling is that they are being very cautious – investigating neighborhoods and floorplans, as well as pricing, to make sure they have all relevant information prior to making an offer. There are some homes that do attract multiple offers – those that are priced right and show well – but for the most part those who do their homework will be in a great position to purchase and should not have to worry too much about competition if they are approved and ready to purchase without having to sell their homes first. Those who do have to sell first could still be in a good position to buy, but in cases where there are other offers theirs could be overlooked in favor of buyers with no sale contingencies.
Overall, the increase in home buying power due to lower prices, low interest rates and a decent supply of inventory, is in the hands of today’s buyers, so now is a great time to get preapproved and shop around if you are in the market to purchase.