Although interest rates are about as low as they’ve ever been, the home buying market hasn’t been as active as we would have thought. Here’s why.
As summer draws to a close, multiple opposing factors and trends are competing to define the future of the real estate market. After the Federal Reserve lowered its benchmark interest rate on July 31, the 30-year mortgage rates continued to decline and are approaching all-time lows last seen in 2018.
Most experts agree these reductions aren’t likely to bring sufficient relief, at least in the short term. For first-time homebuyers, that’s an issue. The lack of affordability and the persistence of historically high housing prices continue to affect the housing market, leading to lower-than-expected existing home sales at the national level. Here are some of the numbers we’ve been looking at:
- Closed sales: Down 3.8% for detached homes and 6.9% for attached homes
- Pending sales: Up 18.4% for detached homes and 15.1% for attached homes
- Inventory: Down 21% overall
- Median sales price: Down 1% for detached homes and up 3.5% for attached homes
- Days on market: Up by 24% for detached homes and 10% for attached homes
“Most experts agree these reductions aren’t likely to bring sufficient relief, at least in the short term.”
As many homeowners refinance their home to take advantage of the declining rates, consumer confidence in housing is still reported to be at historically high levels. Even so, real estate professionals will need to be monitoring the market for signs of continued imbalances.
Although the inventory of affordable homes at this point remains largely stable, it’s stable at historically low levels which may continue to push prices higher for potential buyers across the United States. We’re going to see what happens in the fourth quarter and, hopefully, better results will happen in 2022.
If you have any questions for me in the meantime or want to learn more about what’s going on in the market, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.