Seasonality is a vital element of the housing market. Spring and summer months are typically “hot”, as homebuyer competition rises while housing inventory declines. The housing market throughout the fall and winter months then typically begins to slow. With highly favorable rates predicted to continue throughout the end of the year, however, what should we expect with the housing market this season? Let’s take a closer look.
According to the National Association of Realtors’ latest report, home sales are significantly up since last year. More specifically, existing home sales have increased 2.1 percent and total home sales have risen 0.9 percent since 2016. If home sellers continue putting homes on the market, we could even be looking at the best year in home sales since 2007.
Although home sales have slowed 1.3 percent between June and July, industry experts predict that the market could pick up speed again soon. Mortgage rates remain relatively low and job gains throughout the country have continued to surge. The only potential restriction to housing market growth is the number of homes actually on the market. According to the report, we are currently dealing with a 4.2-month supply of existing “for sale” homes and a 5.8-month supply of new “for sale” homes throughout the country. While new home starts have recently increased, construction has progressed slowly and unevenly throughout various cities. In other words, housing supply and demand rates remain unbalanced.
With housing supply unable to meet home buying demands, we can also expect home prices to remain slightly higher than usual - but lower than the spring and summer months. For more information about what to expect with the housing market this season, or to learn how to prepare for the new expenses of homeownership, contact one of our mortgage specialists or download Transitioning Into Homeownership: How to Plan for the New Expenses today.