Mortgage News March 16, 2023
Realtor.com’s Monthly Housing Trends Report reveals that the supply of homes for sale in February increased at a record annual pace for the sixth consecutive month, rising 87.8% YoY. This trend suggests that the real estate market is gradually rebalancing. However, the increase in inventory has not resulted in a drop in home prices, as prices rose at a rate of 7.8% compared to last year.
As the market currently favors neither buyers nor sellers, both parties will have to make concessions to close deals. Additionally, fluctuating mortgage rates are driving up the cost of purchasing a home. Chief Economist for Realtor.com Danielle Hale notes that buyer interest is being affected by the combination of elevated home prices and mortgage rates, leading to homes staying on the market for more than three weeks longer than they did last year. With fewer buyers in the market and more competition from other homes, sellers may need to adjust their price expectations to make a sale this spring.
As warmer months approach, many potential buyers will begin or pick up their search for a new home. Clare Trapasso, executive news editor at Realtor.com, states that “potential buyers looking to take advantage of more homes to choose from and a less competitive pace also has more negotiating power than they did a year ago.” Buyers who come across homes that have been on the market for a while without any offers may have more leverage to negotiate with sellers. They may ask for closing cost contributions, expensive repairs to be made, or even a mortgage rate buydown.
While the real estate market is gradually rebalancing, home prices remain high, and buyers and sellers must make compromises to close deals. As the warmer months approach, buyers may have more negotiating power, and sellers may need to adjust their price expectations to make a sale.
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