Home Price Growth Has Just Showed a Clear Sign It’s Reaching Its Peak—Here’s Proof

Home prices are reaching their peak

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It’s hard to not feel bad today for homebuyers, who are being simultaneously squeezed by rising mortgage rates and ever-higher home prices. But at long last, some relief seems to be on the horizon.

How’s the Housing Market This Week?” is our regular column in which we look at real estate statistics. For the week ending Sept. 10, they indicate that the runaway real estate inflation that homebuyers have been struggling to keep up with is slowing down—if just by a bit.

“Although home prices continue to register double-digit growth relative to one year ago, the rate took a notable step back this week to the lowest pace since January,” notes Realtor.com® Chief Economist Danielle Hale in her analysis.

Here are the latest figures and what they mean for both homebuyers and sellers so that all can stay on top of today’s fast-changing market.

Weekly Housing Trends - latest

Home prices are still growing, but they’re definitely slowing

In August, home prices hovered at a national median of $435,000. And prices are still rising—by 11.7% for the week ending Sept. 10 compared with this same week last year.

While that’s the 39th straight week of double-digit growth, the glimmer of good news for buyers is that this week’s rate does mark the lowest level seen since January. The home price growth in previous weeks clocked in even higher—in the 15%–16% range throughout July, followed by the 13%–15% range in August. In this context, this latest week’s 11.7% price growth doesn’t seem so bad.

Plus, now that summer’s homebuying frenzy is over, real estate prices are already sloping downward along with dwindling temperatures.

“Home prices typically decline as we move into the second half of the year, one of the key seasonal trends that help make fall the best time to buy a home,” says Hale.

In fact, statistics suggest that the very best time to buy a house in the entire year is the last week of September, when prices are slated to be $20,000 lower than June’s all-time high of $450,000.

In other words, home shoppers who want to double down on their efforts right when the cards are heavily stacked in their favor had best hit those open houses hard right now before this prime window of opportunity closes.

New real estate listings dropped a lot

For the week ending Sept. 10, the number of new home sellers putting their properties on the market dropped by 13% compared with this same week last year. That’s the 10th straight week of year-over-year declines, and a double-digit drop at that.

Clearly, “sellers are less optimistic about conditions compared to a year ago, which is a likely factor behind the scarcer new listings trend,” says Hale.

Nonetheless, overall housing inventory—a combination of these fresh listings and stale ones still on the market that have yet to find a buyer—is strong, up by 27% over last year.

“While the number of newly listed options was smaller, today’s shoppers have more than five homes to consider for every four they had at this time a year ago,” Hale explains.

Home sales are slowing

Since the COVID-19 pandemic, the pace of home sales has sped up, with median days on the market in August clocking in at a mere 34—22 days faster than this same month from 2017 to 2019.

Yet finally, this frenetic rush is mellowing. For the week ending Sept. 10, properties spent six extra days on the market compared with a year earlier. That’s the seventh straight week of homes sticking around for sale longer than last year.

Still, Hale reminds us, “relative to pre-pandemic, shoppers need to make faster decisions.” And the pace of sales will range widely based on where the house hunt is taking place.

Homes in the country’s hottest markets—currently in the Northeast and Midwest, which offer affordability—will still disappear quickly. (For example, listings in the hottest market of all, Manchester, NH, linger a mere 23 days before being snapped up.)

“And with more shoppers than ever before willing to look across state lines for a home, affordable areas are likely to see ongoing demand,” adds Hale.

Mortgage rates broke the 6% mark

According to Freddie Mac, for the week ending Sept. 15, the average 30-year fixed mortgage rate increased to 6.02%, up from the previous week’s 5.89%.

And since many are bracing for the Federal Reserve to hike its short-term interest rates at its meeting next week to combat stubborn inflation, mortgage rates may continue rising, making this fall’s housing market more of a mixed bag of good and bad news for buyers.

“Higher mortgage rates combined with still-high home prices are making it challenging for homebuyers as we head into what historically has been the best time of the year to find a better deal,” Realtor.com Senior Economist George Ratiu notes. “Something has to give.”

The post Home Price Growth Has Just Showed a Clear Sign It’s Reaching Its Peak—Here’s Proof appeared first on Real Estate News & Insights | realtor.com®.

The Riskiest Housing Markets, Where Home Prices Could Fall the Most

The Riskiest Housing Markets

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With the housing market correction well underway, the big question on the minds of just about everyone is if home prices are poised to fall. Mortgage rates are rising, fears are mounting that the nation will slip into a recession, and inflation continues to soar.

Something has to give, right?

However, when it comes to real estate, it’s all about location. New Jersey, Illinois, and inland California had the most at-risk real estate markets if the nation slips into an economic downturn, according to real estate data firm ATTOM. New York City and Chicago were particularly susceptible.

Meanwhile, the South and Midwest were the least vulnerable.

“Most of the markets that are most at risk tend to have higher unemployment and tend to be the least affordable markets,” says Rick Sharga, executive vice president of market intelligence at ATTOM.  “We’re not suggesting any of these metros is in imminent danger of a housing crash. In the event of a recession, these metro areas would be the most likely to have some fallout.”

To come up with the list, ATTOM assessed the vulnerability of 575 U.S. counties by looking at the percentage of homes facing a potential foreclosure; the share of homes with mortgage balances that were higher than property values; local unemployment; and the percentage of average local wages needed to afford homeownership expenses. Counties had to have enough data to analyze.

The analysis assumes that the Federal Reserve’s determination to continue raising rates to combat inflation, along with other worrying economic factors, will push the nation into a recession. If that happens, some parts of the country are likely to fare better and worse than others, similar to what was experienced during the Great Recession.

Nearly two-thirds of the 50 most at-risk counties were in the Chicago, New York City, and Philadelphia metropolitan areas and in inland California. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

“When you look at the top 10 to 15 most vulnerable markets, they tend to be in places like the New York metro and the Chicago metro, where you have limited affordability and relatively high unemployment,” says Sharga.

On the other hand, at least half of the 50 least vulnerable markets were in the South and 14 were located in the Midwest. Tennessee, Wisconsin, and Arkansas had the most markets that were deemed safer.

“In the South, homes are less expensive,” says Sharga. “And many of the people moving into the South have been moving out of high-priced, high-taxed states and looking for more affordable properties [to help buffer these markets]. They have very, very strong employment as well.”

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Watch: As Summer Comes to an Unofficial Close, Where Does the Housing Market Stand?

 

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Exclusive: Jonathan Knight and Kristina Crestin Take Us Behind the Scenes of ‘Farmhouse Fixer’

Farmhouse Fixer

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Jonathan Knight may have found fame as a member of New Kids on the Block, but this former teen heartthrob has also transitioned from crushing dance moves to renovating farmhouses.

Knight hosts HGTV’s “Farmhouse Fixer” along with longtime friend and interior designer Kristina Crestin. In the series, which airs on Wednesdays, Knight and Crestin renovate old farmhouses in New England, restoring them to their former glory.

Now, they’re back for Season 2, showing off new designs, new challenges, and even a touch of the paranormal. Knight and Crestin spoke to us about the new season, their friendship, and the special challenges that come with restoring a farmhouse.

How did you two meet and end up working together on ‘Farmhouse Fixer’?

Jonathan Knight: I think like 20 years ago, she worked at a design firm I’d hired, and the first day we met, I just fell in love with her personality, her design style. And it has been nonstop since.

Kristina Crestin: I was less than a year out of college when I met Jon and worked on his project. Jon was the first client that I met that was really into design and engaged and super excited about all the things he wanted to do, which was different than the average homeowner.

So it’s crazy now to think that that truly was 20 years ago. When did we get old?

What made you interested in renovating farmhouses? Is there something special about farmhouses for you?

Knight: My great-uncles all had their farms in Canada, and I would spend summers there, and I fell in love with the whole farm aspect really early on as a kid. I grew up in the city in an old house, but we had a carriage house on the property and slowly I filled up the barn with ponies, some sheep, goats, hens, gardens in the backyard.

So it was kind of my foray into the farm life, and later on, I moved out of the city, moved out to the country, and got about 20 acres. I think it’s very relaxing to live off the land, enjoy nature.

Crestin: I actually hadn’t worked on that many older houses until this opportunity to do this show with Jon popped up.

So, doing this show has brought me the opportunity to focus on older homes, which is a whole other set of problem-solving—kind of neat to take on because it, like, just flexes this other part of my brain.

So it’s like right now, I have a split personality because I love the master planning of new construction. But I love just getting in there and the thought process involved with all these farmhouses. You really need to think on your feet a lot, because every day you might uncover something new.

Farmhouse Fixer hosts
Jonathan Knight and Kristina Crestin in the newly renovated O’Conner farmhouse

HGTV

What’s the most challenging request that you’ve gotten from homeowners?

Crestin: For one of our projects, they wanted to do the reverse of what some people do: They wanted to take out the office that was right off the front foyer and put a mudroom in the front of the house—which, if you really think about new construction, no one ever would design it that way because the mudroom is usually tucked over by the garage or it’s hidden away. It’s usually not front and center.

All I could think of is, like, “Oh, my gosh. Well, it’d better be beautiful.”

They wanted a boot-washing station because it’s a working horse farm. So, for like a minute, it was like, “How are we going to do that and make it look good?” And in the end, it’s probably one of those bad-ass mudrooms we’ve ever done because there was this pressure of everyone seeing it from the front door. So that was a little bit weird, but it turned out so wonderful.

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Are there any specific problems that have made these old farmhouses challenging?

Knight: In Season 1, we had some cracked pipes behind the wall that were very unexpected. We had a whole back wall of a kitchen that was just completely gnawed by carpenter ants.

And that’s what comes with old houses sometimes. I think a lot of people don’t think that if they’re going to renovate, they may have to build a whole, brand-new back wall and may have to redo the majority of the plumbing.

Crestin: Yeah. Did you forget that we needed the fire department in one house? In that house, we uncovered steel. Somebody must have done the renovation not a long time ago, and there was all this weird steel. So Jon had to cut through the steel, which made sparks. The fire department had to be there. You open up the wall, and then you need to, like, pivot and shift the schedule and move as fast as you can. It’s kind of crazy.

What are your tricks for making these houses feel like true farmhouses instead of trendy, modern farmhouse styles?

Crestin: You’ll see there’s a lot of millwork, beadboard, and beams on the ceiling. Paying attention to ceilings becomes the biggest thing, which also really drives the budget. Because when you think about an older home and you don’t want it to look like a brand-new kitchen, the only way to do that is to layer on more detail. If you strip out all that detail, you wouldn’t have the feeling of an older home.

And likewise, materials matter. If you really look, a lot of them are always using natural stones like slate and brick and soapstone. We’re trying not to use new materials. And plumbing finishes: We use a lot of unlacquered brass or oil-rubbed bronze, and we want those finishes to patina over time, which is completely the reverse of the trend of durability and looking perfect forever. But in a farmhouse, you don’t want that. You want things to show age.

So I think it’s all of these little decisions strung together that correctively create that feel.

Jonathan Knight
Knight works on the demolition at his personal farmhouse in Boston.

HGTV

Do you two ever butt heads when it comes to design?

Knight: A few times. I mean, Kristina will show me a color palette and she’s like, “Am I crazy for doing this?” And I’m like, “Yeah, a little bit.” So I think on color, we butt heads a lot. But it always seemed to turn out just perfect.

Crestin: Staircases are somehow our kryptonite. I’ll be like, “OK, I’m painting the staircase,” and then Jon looks at me, horrified. Then we just go through all the pros and cons about what we’re going to do and what we’re salvaging, what’s not worth salvaging. But that’s what compromise is about. You see each other’s point of view, and then you pick a direction forward.

Do you have any other tips for homeowners looking to renovate, whether they have a farmhouse or not?

Crestin: Planning is your friend. When you rush, you make mistakes and you end up spending more money. One of my clients referred me to a ton of friends of hers, and she kept telling them I was insurance. I was like, “What about my mad design skills?” She’s like, “Oh, yeah. Well, that’s a given.”

The budget can really sneak up on people, because a lot of times, they get a budget from a general contractor and it’s just the basics, and they find all of the things not included…

So planning, planning, planning. Sounds so boring, but it will save you in the end.

The post Exclusive: Jonathan Knight and Kristina Crestin Take Us Behind the Scenes of ‘Farmhouse Fixer’ appeared first on Real Estate News & Insights | realtor.com®.

Attention, Home Shoppers: Circle This Week as the Very Best Time of the Year To Buy a New House

Homebuyers Traditionally Save About $20,000 If They Purchase A Home In This Week

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While experts are throwing around phrases like “housing correction” and “slowdown in the real estate market,” things don’t seem much easier for homebuyers in the trenches right now. There still aren’t many homes for sale, and what is on the market is selling quickly—and often for more than the asking price.

Buyers looking for a break—and to save money on the purchase price of a home—should circle the week of Sept. 25 through Oct. 1 on their calendars. Realtor.com® has declared this the best week of the year nationally to purchase a property as there are traditionally about 8.4% more homes for sale. And in a big bonus for buyers, properties are usually priced an average of around $20,000 less than usual.

“The best time to purchase a home is the last week of September, because that’s historically when the market is most hospitable to buyers,” says Realtor.com economic data analyst Hannah Jones. “Typically, the early fall is when there are fewer buyers. There are also more homes on the market, and the housing market is generally calming down from the summer rush.”

To come up with our findings, Realtor.com looked at home list prices, the number of homes for sale, the number of new listings to go on the market, days on the market, views of properties on Realtor.com, and price reductions in 2018, 2019, and 2021. Analysts skipped 2020 due to the COVID-19 pandemic disruption.

The lack of inventory has created a nationwide housing crisis and pushed prices up to record highs. The median list price in August is $435,000—a 14% rise from the same month last year, according to Realtor.com data.

However, the frenzy in the market began dying down a little this spring as mortgage interest rates rose and the worst of the pandemic appeared to be over. Higher rates have served as a cap on prices, thinning out the pool of buyers and limiting just how high buyers are willing to go.

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Watch: How Much Do You Need To Save for a $500,000 Home?

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And now that school has started and parents aren’t desperately bidding on properties to get their families settled before classes begin, the market generally calms down even more as there is less competition.

“The market is rebalancing on top of these seasonal trends that we see every year because mortgage rates have grown. Increasingly, buyers are no longer able to keep up with price growth,” says Jones.

“We expect prices to come down more than is typical from peak,” adds Jones. “Price reductions will likely be higher than the typical year, and demand will likely be lower than the typical year.”

Despite the higher mortgage rates, the market is becoming more buyer-friendly. The number of homes for sale was up 87.3% in August compared with the beginning of the year, and even more properties are expected to go on the market in the coming weeks.

In addition, days on the market increased from an all-time low of 31 in May to a median 42 in August.

The exact week that’s the most favorable to buyers varies geographically. While the first full week of October is the most advantageous nationally, the week of Sept. 11–17 is best for those in the Chicago, Los Angeles, Minneapolis, New York City, and Seattle metropolitan areas among others. The following week, Sept. 18–24 gets the nod for those in Austin, TX, Dallas, Houston, Philadelphia, and Washington, DC.

Last year, the best week to buy nationally was Oct. 3–9.

The best time to sell a home is April 10–16, according to Realtor.com.

“If price is your major priority, then wait a little bit and you’ll likely see lower prices into the fall,” says Jones. “If having a larger selection of homes to pick from is your priority, then buying a little earlier may benefit you as inventory tends to be a little higher in the early fall and then taper off toward the end of the year.”

The post Attention, Home Shoppers: Circle This Week as the Very Best Time of the Year To Buy a New House appeared first on Real Estate News & Insights | realtor.com®.

The Housing Market Is About To Get Hammered: What Homebuyers, Sellers Should Know

The Housing Market Is About To Get Hammered: What Homebuyers, Sellers Should Know

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Homebuyers should expect their financial pain to worsen in the coming months.

Mortgage interest rates are expected to keep rising, likely surpassing 6%, in response to stubbornly high inflation. This could accelerate the housing market correction, which is already well underway, by making purchasing a home even more expensive for cash-strapped buyers, pricing many completely out of the market.

The consumer price index, a federal government measure of inflation, was up 8.3% in August compared with a year ago, according to the Bureau of Labor Statistics report released on Tuesday. Inflation fell from an 8.5% year-over-year increase in July and 9.1% in August. Yet it’s not enough of a drop to prevent the U.S. Federal Reserve from continuing to hammer the economy. And the Fed’s actions are likely to push mortgage rates up even higher.

The Fed is expected to hike its short-term interest rates at its meeting next week. Mortgage interest rates are separate but typically follow the same trajectory as the Fed’s rates. So when the Fed jacks up its rates in an effort to make borrowing money more expensive and weaken demand for products and services, mortgage rates generally tick up as well.

Many experts anticipate mortgage rates will cross the 6% threshold by the end of the year—if not sooner.

“Higher mortgage rates combined with still-high home prices are making it challenging for homebuyers as we head into what historically has been the best time of the year to find a better deal,” says Realtor.com Senior Economist George Ratiu. “Something has to give.”

Mortgage rates have more than doubled in the past year, going from an average 2.88% this time last year to 5.89% in the week ending Sept. 8, according to Freddie Mac. (This is for 30-year fixed-rate loans.) Just this increase coupled with higher prices makes the median monthly mortgage payment nearly two-thirds, 63%, more expensive than the same time a year ago and more than three-quarters, 78%, more expensive more than two years ago.

However, most buyers haven’t seen their salaries go up 78% over the same two-year span.

“Volatility is still going to be the name of the game,” says Lisa Sturtevant, chief economist of the Bright MLS The multiple listing service covers the mid-Atlantic region. Where investors park their money will also influence rates as will lenders competing for customers.

“While we focus on the Federal Reserve’s rate hikes … there are so many other factors that influence mortgage rates,” adds Sturtevant. “And many are moving in different directions.”

The number of home sales is also expected to keep declining as rates reach even higher.

“For a while, we were seeing buyers leaving the market because they couldn’t find anything to buy,” says Sturtevant. “But now there are buyers who can’t make the numbers work anymore.”

Ratiu expects that prices will “have to adjust” given buyers’ budgets being stretched so thin. A single percentage point increase in mortgage rates can result in buyers paying hundreds of dollars more a month on a home—and tens of thousands over the course of a 30-year loan.

“The important thing to remember is that we are in a transition period where prices are likely to continue rebalancing,” says Ratiu. “Prices won’t outright decline year over year this year. However, we might see prices begin to decline in 2023.”

Meanwhile, some economists like Sturtevant don’t anticipate home prices will actually drop—except in smaller real estate markets, vacation areas, and places where prices rose by the most at a breakneck pace, such as Austin, TX, and Boise, ID. She’s convinced the demand for housing is just so great at a time when the shortage of homes available for rent and sale is too significant for prices to fall across the board in a meaningful way.

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Watch: As Summer Comes to an Unofficial Close, Where Does the Housing Market Stand?

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Instead, she expects prices to flatten out.

“We have to live somewhere, and rents aren’t softening much either,” says Sturtevant.

The housing market’s fate isn’t just tied to mortgage rates. The more the Fed hikes rates, the more likely a recession appears. Higher rates mean businesses pay more to borrow money to expand operations and hire and the less consumers spend, shrinking company profits.

If people are worried about the stability of their jobs, they’re less likely to buy a home, often the largest financial purchase of their lives. That could cause prices to come down even more.

“The likelihood of a recession with significant job losses is on the table,” says Ratiu. If “people … feel less confident buying homes, [that] will generate a downward spiral, which could put housing in a nosedive.”

However, with unemployment so low, the nation may narrowly avoid a recession, achieving the Fed’s goal of a “soft landing.”

“We have wage growth, we have historically low unemployment, we have more jobs than we have to fill them,” says Sturtevant. “The pendulum would have to swing dramatically to shift to a situation where we see significant job losses.”

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Stay or Go: The U.S. Metros Where Homeowners Stick Around—and the Ones They Can’t Wait To Leave

Metros where people stay the longest/shortest

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Joe Strummer and Mick Jones put it so poetically in The Clash’s 1982 classic: “Should I Stay or Should I Go?”

It’s a question all homeowners have to face eventually. Is their house one to hold on to, or is it time to move on? Realtor.com® took a deep dive into the data to find the places in the U.S. where homeowners are hanging on to their homes the longest—and where they’re most likely to trade up or trade down more quickly.

It turns out a lot of what goes into that choice depends on the market conditions. In some places, the costs associated with buying and selling are higher—and that can mean holding on longer is more attractive. In other places, fees and taxes are low, and gaining equity is easier, so a shorter stay can mean an upgrade from a starter home, or into a dream home, in less time.

In general, people have been staying in their homes for longer, says Nadia Evangelou, director of real estate research at the National Association of Realtors®.

With home prices having risen rapidly in recent years, Evangelou says, many of the homeowners have taken on mortgage payments that make up a bigger percentage of their incomes. And with higher prices come higher costs and fees, all adding to what’s known as the “lock-in effect.”

Higher prices, higher mortgage rates, larger fees, these make it more difficult to find and purchase the next home,” she says. “So people have to wait longer between buying and selling.”

The places where homeowners often stay for the shortest periods are those that are more attractive to out-of-state buyers, or younger and first-time buyers who might be starting their families, says Evangelou.

So where are homeowners sticking around these days—and where are they eager to scram?

To find out, we looked at sale record data (from CoreLogic, a real estate sale data provider) stretching from January 2001 through August 2022. We focused on the median number of months that passed between the most recent home sale and the previous time it changed hands, for the largest U.S. metropolitan areas. Some areas were excluded, because the available sale data doesn’t go back to January 2011, but the large majority of metropolitan areas (71 of the top 100) were included. To ensure geographical diversity, only the single metro area in each state was included—except in the case of a tie.

1. McAllen, TX

Average time between sales: 10 years, 3 months
Median home list price: $277,000
Median days on the market: 48

In McAllen, the average time between the last two sales of a home is more than a decade. That’s almost a year longer than the next city on the list.

Aside from the fact that home prices in the area are more than 30% lower than the U.S. average, what makes McAllen unique is mostly cultural.

McAllen is a medium-sized city, in southern Texas, right along the U.S.-Mexico border. In fact, it’s so far south, that McAllen residents live farther south than 10 million Mexicans.

For those looking for a bicultural community, McAllen offers a lot. Residents of McAllen can be in Reynosa, Mexico, in a matter of minutes. For three-quarters of households in the area, Spanish is the most commonly spoken language, according to U.S. Census Bureau data. And more than 1 in 4 residents was born in Latin America.

Despite homeowners staying put, there are still homes for sale in McAllen, including this four-bedroom, two-bathroom house for $245,000. Those looking for a deal can scoop up this two-bedroom, one-bathroom house for just $142,000.

2. New York, NY

Average time between sales: 9 years, 5 months
Median home list price: $699,000
Median days on the market: 62

If you can make it there, as Ol’ Blue Eyes sang, you can make it anywhere. But why go anywhere else? At least, that’s what the data shows.

New York has some of the highest barriers to entry of any market in the U.S., with sky-high home values and often mammoth closing and homeowners association costs that come on top of the sticker price.

Grant Braswell, an associate broker at Compass, has been working in the New York City market for 12 years, and he sees every day just how much money it takes to buy in New York.

“If you’re looking at a co-op, a lot of times they require 20% down,” Braswell says. “Then you’re looking at a 5% to 6% broker’s fee” and taxes and additional fees that can add an additional 3% to 5%. These costs add up fast, especially considering list prices that are often above $1 million.

“You could be looking at needing well over $200,000, sometimes up to $400,000 or $500,000, in cash,” Braswell says.

That’s a pretty good incentive for homeowners to stay put.

3. Baltimore, MD

Average time between sales: 9 years, 3 months
Median home list price: $352,495
Median days on the market: 37

Founded in 1729, Baltimore became a booming port town in the 18th century where the nation’s first post office was established. It was later the site of the War of 1812’s eponymous Battle of Baltimore, memorialized in “The Star Spangled Banner.”

It’s fitting that in a city rich in so much U.S. history, homeowners also maintain longevity, with an average of more than 9 years between sales.

Homeowners in some of the city’s older neighborhoods stay forever, says Jackie Ovad, a Realtor® with Keller Williams Realty there.

“Their family lived there, sometimes for generations. If you talk with some of them, they still know everyone on the block,” Ovad says. “You’ve got generation after generation of homes and families. For a lot of them, everything is kept the same.”

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4. Miami, FL

Average time between sales: 8 years, 8 months
Median home list price: 617,000
Median days on the market: 50

Miami earned the nickname “The Magic City” because of its sudden appearance—like magic. The city’s population grew quickly during the first half of the 20th century, its seemingly never-ending summer luring newcomers, especially those fed up with the drudgery of winters in cities farther north.

Carolina Suarez Rivas, a local real estate agent with Basel House, says the city’s population stagnated in the ’80s and ’90s.

“It wasn’t as safe then,” she says. “But a lot has changed in the last 20 years. Once people get a look at it now, they want to be here.”

South Florida has long been a retirement destination, meaning buyers who cash in their nest egg and move into what becomes their final home—one they sometimes keep for 20 or 30 years. This pushes up the average time between sales—and earns Miami a spot on our list.

But there are also more businesses moving to Miami and bringing new residents with them, who end up staying.

“These companies are opening a second office or another branch. A lot of finance. A lot of international business,” Suarez Rivas says. “The taxes are lower here. You have the weather, the ocean, the nightlife. And they just end up staying.”

And whether it’s retirees or new transplants coming for work, the condo communities being built in Miami these days are providing even more of what people are looking for, Suarez Rivas says.

“People who come from big, busy cities are looking for something walkable,” says Suarez Rivas.

5. Washington, DC

Average time between sales: 8 years, 4 months
Median home list price: $572,800
Median days on the market: 36

Homes in Washington, DC, aren’t quite as pricey as those in New York City or Miami, but they’re well above the national average, bringing with them significant fees and costs for every move. That can serve as a big deterrent to buying and selling more frequently. The competitiveness of the local real estate market also keeps many homeowners in place.

In Washington, DC, buyer demand has whittled the average days on the market to just 36, about 25% faster than the national average. That’s even faster than in New York City, where the typical listing spends 62 days on the market. In Miami, that figure is 50 days.

Buyers can find a three-bedroom, 2.5-bathroom, brick row house with a fenced backyard for $649,900. Or they can spring for a one-bedroom condo with a private balcony for $775,000.

Rounding out the top 10 metros where homeowners had the longest tenures in their homes were Oxnard, CA, Toledo, OH, and Cleveland, which tied for Nos. 6–8; Greensboro, NC, at No. 9; and Albuquerque, NM, at No. 10.

1. Colorado Springs, CO

Average time between sales: 4 years, 9 months
Median home list price: $525,500
Median days on the market: 33

Colorado Springs is known for many things, not least of which is the natural beauty surrounding the state’s second-largest metro area. It sits in the shadow of Pikes Peak, one of Colorado’s tallest mountain summits, and claims the awe-inspiring Garden of the Gods on the edge of the city.

It’s also home to several military installations, which helps to explain why homeowners don’t tend to stay where they are for very long. There’s an Army and Air Force base, plus a Space Force base and the North American Aerospace Defense Command (NORAD), embedded inside Cheyenne Mountain just to the southwest of Colorado Springs.

While more senior military members can enjoy longer assignments to a single location, often younger military members are moved to where they’re needed, meaning a sometimes short stay in any given place.

And what might not be clear at first, says Jerrod Butler, a Realtor with Wish Property Group who works with many service members, is that there are also a lot of government service contractors, who work in support roles for the military. Their contracts can be a lot like an armed service assignment, with a few years in one location, then a new assignment somewhere else.

“That’s huge here too,” adds Butler.

2. Greenville, SC

Average time between sales: 5 years
Median home list price: $351,450
Median days on the market: 42

Greenville is often ranked among the best small cities in the nation thanks to its scenic downtown along the Reedy River, vibrant restaurant scene, and burgeoning arts culture. It’s also known for its beautiful surroundings, sitting at the foot of the Blue Ridge Mountains, surrounded by lush, rolling hills.

This has made the city, which is in the northwest “upstate” corner of South Carolina, popular with retirees, students, as well as workers coming in from all over the world. Greenville is about halfway between Charlotte, NC, and Atlanta.

With designated “foreign trade zones” in South Carolina’s upstate, Greenville is home to more than 250 international firms. These companies bring with them frequent corporate transplants, which goes a long way to explain the quick time between home sales there.

Homes are still reasonably affordable in Greenville as well. Buyers can find a three-bedroom, two-bathroom ranch home on a half-acre for just under $300,000 or a two-bedroom, two-bathroom condo in a complex with a pool for just $135,000.

3. Indianapolis, IN

Average time between sales: 5 years, 1 month
Median home list price: $312,500
Median days on the market: 37

The affordable housing stock in Indianapolis means homebuyers can quickly move up the ladder of homeownership—going from a starter home to a larger second home, and eventually into a dream home—faster here than in most other places, says Kelly Lavengood, a Realtor with Good Living Indy.

“I ask people how long they intend to stay in the home they’re shopping for,” Lavengood says. “If the answer is ‘three or four years, and then we buy the dream home,’ then they have a lot more flexibility in what they’re shopping for now.”

This three-bedroom, 2.5-bathroom house with a fire pit is for sale for $289,900 while this updated brick ranch is on the market for $250,000.

4. Knoxville, TN

Average time between sales: 5 years, 1 month
Median home list price: $412,400
Median days on the market: 38

Knoxville has recently been dubbed “Knox Vegas,” a reference to both the art, music, sports, and nightlife culture that surrounds the University of Tennessee and the population boom the city has seen in recent years. It’s been one of the 10 fastest-growing U.S. cities in recent years.

Knoxville’s low cost of living and decent salaries have earned it the distinction of being an especially attractive city for recent college graduates. It’s no wonder it has a short average time between home sales, at just over five years. Younger homeowners are more likely to buy and sell more quickly.

Homes are in high demand here, too. They are on the market about 17% fewer days than the national average, another reason why owners might look to sell more frequently.

5. Spokane, WA

Average time between sales: 5 years, 4 months
Median home list price: $495,500
Median days on the market: 34

Spokane is a surprise for those unfamiliar with the Evergreen State. It’s far from the sprawling metropolis that’s long been an icon for the state, Seattle, situated along Washington’s eastern edge and only about 45 minutes from Coeur d’Alene, ID. It’s even closer to Missoula, MO, than to Seattle.

It’s not just far geographically; it also has a totally different environs. With a population of only about 219,000, Spokane offers a less busy, less urban lifestyle, with access to the great outdoors just beyond the city boundaries. And the housing market is also more affordable than other West Coast cities.

“Historically, we’ve been just below the national average,” says Marianne Bornhoft, Realtor and broker at Windermere Manito Real Estate, “so it’s a sweet spot where people can buy, immediately add equity by fixing up a home, and then sell and buy something a little bigger or nicer.”

The low prices, along with homes that could use updating, have meant it’s been a great market for the right buyers.

Those factors, along with the moderate climate and abundance of outdoor, quality-of-life amenities, led to a boom during the COVID-19 pandemic.

“I’ve always told people that they need to hold on to a home for three-and-a-half or four years in order to make money with it. But in the last two or three years, Spokane’s prices have doubled,” Bornhoft says, “so people have been able to make it work out much faster.”

Recognizing the opportunities, Bornhoft took advantage herself and bought, renovated, and sold a local home all during the pandemic.

“I’m part of your statistic,” she says. “I did a pandemic flip and even blogged about it.”

Rounding out the top 10 metros where homeowners have the shortest tenures in their homes were Lakeland, FL, at No. 6; Atlanta, at No. 7; then Phoenix, Salt Lake City, and Oklahoma City, OK, tied for Nos. 8–10.

The post Stay or Go: The U.S. Metros Where Homeowners Stick Around—and the Ones They Can’t Wait To Leave appeared first on Real Estate News & Insights | realtor.com®.

‘The Market Has Begun To Correct Itself’: House Hunters Say They’re Ready To Buy in the Next Six Months—Even in a Recession. Here’s Why.

Residential homes in San Francisco, California

David Paul Morris/Bloomberg via Getty Images

The economy is in a recession? 30-year mortgage rates near 6%? Doesn’t matter—some home buyers are still planning to buy a home in the next six months, according to a new survey.

According to the survey by Realtor.com, which looked at visitors accessing listings as well as search results, nearly 46% of would-be house buyers polled said they’re planning to go ahead and purchase a home in the next six months, even though recession fears are weighing on prospective buyers.

That’s higher than the share of buyers who planned to buy in July 2019.

That’s also in spite of mortgage rates reaching the highest level since 2008, and as high home prices continue to hold their ground.

The data from the survey show that “some home shoppers are finding silver linings in the form of cooling competition,” Danielle Hale, chief economist at Realtor.com, said in a statement.

With rising inventory levels, and options available in smaller, more rural markets, “this fall could bring relatively better chances to find a home within budget,” she added.

(Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.)

Two in five buyers believe that the U.S. economy is already in a recession. But 42% of respondents said that the recession will have “no effect” on their decision to buy a home.

In fact, around 27% of buyers are actually more likely to buy amid a recession. That’s up from 24.7% from last year.

But the market’s also made of buyers who are very spooked by the current conditions. The share of buyers who say they’re a lot less likely to buy now amid a recession rose from 5% last year to 6.5% this year.

There are emerging signs of the market tipping in buyers’ favor: Fewer buyers are being outbid, dropping from a peak in April of 12.6% reporting that they were beaten out, to 9.4% in July.

‘The share of buyers who report being overbid on a home has decreased as the market has begun to correct itself.’
— Realtor.com report

“The share of buyers who report being overbid on a home has decreased as the market has begun to correct itself,” Realtor.com said.

About half of buyers also said they’re looking to buy in a small town or a rural area.

But it’s still a slog to buy a home for some.

First-time buyers are facing some issues when it comes to buying a home: More than 12% reported being outbid.

Two in five first-time buyers also said that their budget has been a challenge in the process of buying a home.

The median price of homes in the U.S. nationally was $435,000 in August, Realtor.com said. That’s down from an all-time high of $450,000 in June.

Around 20% also said that their credit score was “interfering” with their plans to buy. (This is compared to 9.5% of all buyers).

The post ‘The Market Has Begun To Correct Itself’: House Hunters Say They’re Ready To Buy in the Next Six Months—Even in a Recession. Here’s Why. appeared first on Real Estate News & Insights | realtor.com®.

Could Empty Downtown Office Buildings Really Help Solve America’s Housing Crisis?

Old office buildings to become housing for people in the USA

Photos: Getty Images; Design: Realtor.com

The nation is in the grip of a crushing housing shortage. Home prices and rents are near or at record highs, and there aren’t nearly enough homes for the people who want them.

And yet some of the country’s most desirable real estate in prime locations sits mostly vacant.

Experts predict that many office buildings, often located in urban downtowns and on the edges of suburbs, will never return to full occupancy as many remote workers have been loath to schlep back to their desks full time.

Workers in the nation’s priciest cities with long, expensive commutes have been especially resistant to returning to their offices, even as the threat of the COVID-19 pandemic has faded. But as corporate America lurches toward some kind of new normal, the question of what will happen to some of the unused office space has pushed again to the forefront.

Even as many workers file back to their offices this week—some for the first time since the pandemic took hold—the future of many of these towering, half-empty buildings remains uncertain.

Some office buildings are indeed likely to have second acts as apartments, condos, and other types of housing. While this kind of large-scale transformation won’t solve the housing crisis, it could add desperately needed housing stock to the market.

“We’re not going to need as much office space as we have now,” says Brian Kropp, vice president of research in human resources at Gartner. The international consulting firm works with medium to large companies with annual revenues of at least $1 billion. “It’s in a city’s interest to do something with that space.”

Nationally, offices had just a 43% occupancy rate in the week ending Aug. 24, according to security systems company Kastle. And even as large companies such as Apple are requiring workers to return to the office at least three days a week, other companies like Twitter are downsizing their office space as workers can remain fully remote if they choose.

The reimagining of offices to housing has happened before—in fact, it’s been slowly underway since the 2010s, when the nation was in the throes of the Great Recession.

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Watch: Is 3D Printing the Future of Home Building?Is 3D Printing the Future of Home Building?

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Last year, more than 8,000 apartment units were estimated to have been created from former office buildings, according to rentals site RentCafe. About 13,000 more units in previous office buildings are expected to come online this year. Most of the units were completed in Philadelphia and Washington, DC, and the most on tap for this year are in Los Angeles and Cleveland.

But with the ongoing uncertainty of post-pandemic working environments, these types of conversions could get turbocharged.

Some office towers could go the way of “dead malls,” which many cities have repurposed into developments that mash up shopping with housing, entertainment, and dining. Some could even be retrofitted into schools, senior centers, or other community spaces.

But here’s the thing: Converting an office building into an apartment or condo building takes more than just a snap of the fingers. These are often costly, difficult projects that typically take years and miles of bureaucratic red tape to complete.

“One of the problems with trying to [repurpose] these types of buildings as housing is these areas tend to have higher costs, a lot more regulatory barriers, and long timelines for getting projects done,” says Jason M. Ward, associate director for the Rand Center for Housing and Homelessness in Los Angeles. “The areas where you might have the most opportunities are the areas that are the hardest to build in.”

These adaptive reuse projects, as they’re called, can take a long time to complete.

“The cost of conversion coupled with the challenges of high labor and supply chain [problems] and zoning changes that would be required could take a number of years,” says national real estate appraiser Jonathan Miller. “And by then, who knows what the needs will be?”

Why offices could remain empty

Some companies, especially financial and legal firms, have already ordered employees back to the office five days a week. But plenty of employers are coming to grips with the reality that their workers may choose not to return to the office full time.

New York City “is booming,” says Miller. “But [residents] are not coming back to work in a physical office.”

New York City had the lowest office occupancy rate of the 10 cities tracked by Kastle. Just 35.3% of workers had returned to their cubicles in the week ending Aug. 24. They were also below 40% in Washington, DC, San Francisco, and Silicon Valley’s San Jose, CA.

Meanwhile, more than half of employees were back at their desks in the Texas cities of Houston, Dallas, and Austin, where the cost of city living and commute times are lower.

Companies are now expecting that about a quarter of employees whose jobs can be done remotely will never come into an office, according to Gartner. Over half of employees who can work remotely will be hybrid. The remaining nearly 20% of these workers will go to their offices five days a week.

“If 1 in 4 employees are not going to be in the office ever, why do [we] need space for them?” says Gartner’s Kropp.

Holding on to unused square footage is expensive for companies. They have to pay to heat and cool the space, clean it, and provide electricity, technicians, office supplies, and machinery. And they have to cough up rent.

About a quarter of the companies Gartner works with have shed office space. An additional 40% plan to do the same and are in the process of figuring out how much square footage to downsize. The remaining 35% are still assessing their future real estate needs.

The problem is that businesses generally lock in office leases for anywhere from five to more than 20 years. So a firm that signed a new lease or renewed an existing one right before the pandemic could be locked in for nearly two more decades.

As corporate tenants move out and continue downsizing over the next few years, the viability of these office buildings will come more into focus.

“This is painful,” says Tracy Hadden Loh, a fellow at the Brookings Institution who specializes in commercial real estate. However, “things are going to start to accelerate in two or three years.”

Which kinds of office buildings could be reimagined as housing?

Older, generic office buildings—often constructed in the 1970s and 1980s, dotting the downtowns of cities, and perched in suburban office parks or near highways—are most vulnerable to conversions. These Class C buildings, as they’re known, often don’t have the amenities that modern workers want, such as lots of natural light and indoor-outdoor spaces, and typically aren’t as energy-efficient as newer buildings.

These buildings are experiencing “their midlife crises” and are ripe to become something else, says Hadden Loh. “There’s still new demand for offices. It’s just new demand for new offices.”

When it comes to older buildings, only about 30% are good candidates for conversions, says Steven Paynter, a principal at architecture and design firm Gensler. The firm recently completed the Franklin Tower Residences, with created about 550 luxury apartments from a former office tower in Philadelphia.

Buildings need to be laid out in a way that is amenable to a conversion. And even in mostly empty buildings, a few tenants will likely be holding on until their leases expire—which could take years. Then the developers must receive zoning and approvals to push the projects through.

However, Paynter believes most cities will begin these transformations over the next few years.

“A lot will be converted as there’s a lot of interest in it now, not just from developers, but from cities as well,” says Paynter. “You can add some 24/7 life to these cities by converting some of these buildings.”

However, there will still be plenty of office space. Corporate executives still want places where workers can go, collaborate, and work. Younger workers, in particular, are eager to meet their colleagues in person, make connections, and get face time with their mentors. They just want more inviting places to spend their days.

“The old job of the office was [to be] the place where people came to do work. Now it needs to be the place where people come to connect and build relationships with one another,” says Kropp. Companies are “really trying to think through how to create more collaborative spaces in a new hybrid [working] world.”

The post Could Empty Downtown Office Buildings Really Help Solve America’s Housing Crisis? appeared first on Real Estate News & Insights | realtor.com®.

America’s Hottest Markets Today Can Help Homebuyers Save Six Figures—Here’s Where They’re Hiding

photos of portland, maine, and worcester MA, new hampshire

Getty Images

What makes some real estate markets “hotter” than others? In the past, homebuyers might have dreamed of places with gorgeous weather, good schools, or other desirable amenities. Today, though, the hot-or-not contest boils down to one simple question: Are the homes there a bargain? 

A new report by Realtor.com® on August’s hottest real estate markets suggests that affordability is the No. 1 priority among today’s homebuyers, with 16 of the top 20 markets boasting home prices well below the national median of $435,000.

This laser focus on finding a real estate deal makes total sense, given homebuyers’ budgets right now are being squeezed on all sides, leaving less cash to put toward purchasing property.

“The list of hottest markets in August underscored the affordability theme, with the top 20 markets sporting an average list price of only $332,000, a 24% discount from the national median,” explains George Ratiu, manager of economic research for Realtor.com. “With home prices, rents, gasoline and energy, as well as other consumer prices leaving less money in consumers’ pockets at the end of every month, homebuyers are seeking high and low for more affordable homes.”

How rising mortgage rates factor in

While homebuyers searching in hot markets typically face grueling competition and a breakneck pace, the savings in the long run are significant enough to be worth the effort, given today’s high mortgage rates.

“In practical terms, a buyer would need about $66,000 to meet a 20% down payment for a home in the top 20 hottest markets, netting a $1,535 monthly mortgage payment, at last week’s 30-year fixed interest rate,” explains Ratiu. “In comparison, a buyer looking at a home priced in line with the national median would need $87,000 for the same 20% down payment, and would have to bear a $2,011 monthly payment to service the mortgage.”

This means that homing in on an affordable market could amount to saving 31% in housing costs every month (excluding expenses beyond the home loan, such as property taxes, home insurance, and HOA fees).

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Watch: America’s Hottest ZIP Codes for Real Estate in 2022

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Where America’s new hottest markets are hiding

For the first time in this data’s history, America’s formerly highly desirable—and less affordable—Western markets are nowhere to be seen.

Instead, many of August’s home shoppers landed in the mighty Midwest, which took nine of the hottest markets spots. The rankings factor in a combination of demand (measured by the number of unique views per home listing) and how quickly homes are selling in that area.

“The Midwest is home to a significant number of cities which offer affordable housing and higher quality of life,” Ratiu says. “Conversely, this month’s data highlights the absence of housing market in the West, which have experienced steep price gains and prices far outpacing most Americans’ incomes.”

Specifically, Springfield, OH, stands out alongside Saginaw, MI, for offering homes for sale priced below $200,000 in August. Springfield (No. 4) was the least expensive market of all, with home prices averaging $167,400.

And the draw of these towns goes beyond the budget-friendly home price.

“In addition to affordable housing, these cities have experienced rebounding economies over the past few years, with rising jobs and new residents,” says Ratiu. “Both metros are situated along major transportation routes, linking them with larger employment and commerce hubs such as Dayton and Columbus for Springfield, and Detroit for Saginaw.”

Springfield and Saginaw’s combination of cheap homes, bustling economies, and central locales has attracted a growing number of buyers from out of state. In fact, 29% of homebuyers sifting through Springfield listings on Realtor.com hail from outside Ohio—particularly more expensive metros like New York City; Chicago; Washington, DC; and Atlanta. Likewise, 24% of Saginaw home shoppers hail from those same high-priced metros.

The other Midwest markets on the list were Elkhart, IN; Lafayette, IN; Monroe, MI; Columbus, OH; and Racine, WI—all of which were priced below the national median.

The post America’s Hottest Markets Today Can Help Homebuyers Save Six Figures—Here’s Where They’re Hiding appeared first on Real Estate News & Insights | realtor.com®.

The Fall Housing Market Takes a Miraculous Turn Where Buyers and Sellers Can Gain Big—If They Know What To Do

Both Homebuyers and Sellers Stand to Gain Big in housing market

Getty Images

The fall housing market is beginning to show its true colors—and so far, the outlook appears rosier for both homebuyers and sellers.

Real estate is typically seen as a zero-sum game, where a homebuyer’s gain is a seller’s loss, and vice versa. Yet the latest installment of our “How’s the Housing Market This Week?” column finds statistics for the week ending Sept. 3 shining favorably on both sides of the bargaining table.

First, the good news for buyers is that fall is typically the best time to buy a home—and this autumn is shaping up to be better than usual with a bumper crop of homes on the market with a longer shelf life than they’ve had in the past.

“For today’s home shoppers, there are more homes available for sale, and there may be more time to make an offer on one,” notes Realtor.com® Chief Economist Danielle Hale in her analysis.

Meanwhile, the good news for home sellers is there appears to be “a renewed recognition of the relative advantages today’s sellers have,” Hale continues. Namely, record-high home equity, thanks to skyrocketing home prices.

Since the numbers never lie, here are the latest figures and what they mean for both homebuyers and sellers so that all can reap the bounties of the fall market.

Home prices are still soaring, but heading south for the season

For the week ending Sept. 3, listing prices rose by 13.4% over that same week last year.

“The typical asking price of homes was up from last year by double digits for a 38th week,” says Hale.

Yet month to month, prices are spiraling downward, which bodes well for home shoppers. August data from Realtor.com places the median home price nationwide at $435,000—down from June’s all-time high of $450,000.

“Home prices typically decline as we move into the second half of the year, a seasonal trend that was somewhat disrupted in the overheated [COVID-19] pandemic market,” says Hale. “This year’s data signals a more expected pattern.”

New listings dropped, but there is plenty of inventory

Yes, many home sellers are still kicking themselves for missing the peak of the market. And as a result, a growing number aren’t bothering to list at all. For the week ending Sept. 3, the number of new home sellers entering the market dropped by 6% year over year.

“This week marks the ninth straight week of year-over-year declines in the number of new listings coming up for sale,” says Hale.

Yet this is a smaller dip than seen in the previous three weeks, which experienced double-digit declines. Plus, overall housing inventory—of both new listings and oldies still lingering on the market—ticked up by 27% after an extremely sluggish August.

“The housing market’s rapid growth in inventory from May to July had stalled in August as buyers and sellers adapted to shifting housing market conditions,” Hale explains. “This week’s data snapped a four-week streak of slowing momentum.”

Still, she concedes that new listings are a better barometer of seller enthusiasm and harbinger of what’s to come—and will be the number to keep an eye on going forward.

Home sales are slowing but still brisk

In August, listings lingered on the market a mere 34 days before getting snapped up—that’s 22 days faster than the typical August from 2017 to 2019. But the housing market’s frantic pandemic pace is at long last winding down.

For the week ending Sept. 3, properties spent five extra days on the market compared with a year earlier.

“For a sixth straight week, homes are sitting on the market for a longer time than last year,” says Hale.

Still, this is by no means permission to take your sweet time, with Hale pointing out, “relative to pre-pandemic, shoppers need to make faster decisions.”

Mortgage rates are up to nearly 6%

According to Freddie Mac, for the week ending Sept. 8, the average 30-year fixed mortgage rate increased to 5.89%, up from the previous week’s 5.66%. That’s a whole lot of pain for buyers that’s bound to put downward pressure on prices.

“Buying a home remains a pricey undertaking as mortgage rates continue to trend higher,” Hale concludes. “As buyers navigate high costs resulting from price gains and mortgage rate increases, sellers will find that they are more price-sensitive and more willing to ask for contract concessions than last year’s shoppers.”

In other words, buyers are driving a harder bargain than they could have during the raging seller’s market of the past. And thanks to those high home prices, sellers who give a little still stand to gain a lot, creating that rare, beautiful possibility of a win-win scenario for all.

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Watch: 7 Red Flags To Watch for When Buying a Home ‘As Is’

 

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