Realtors are confirming what housing data is starting to show. More homebuyers are coming out of their self-imposed hibernation.
Mortgage applications for home purchases increased 25% week-on-week. Mortgage Bankers Association (MBA) Survey found for the week ending Jan. 13. Housing sentiment rose late last year. fannie maeHomebuilders are also reporting an increase in buyer traffic in January, the first rise since December 2021. industry research.
These buyers hope to be rewarded from a more lucrative market before the spring buying season attracts more competition.
Broker for Compass, urban condo space.com, told Yahoo Finance. “They wanted to see what the market was going to look like. With the market stable and interest rates down, they wanted to be one step ahead of what would inevitably be the bottom for real estate.”
“call people back”
The decline in mortgage rates in recent weeks is just a short distance from the record rise recorded last year. last week, Average interest rate for 30-year fixed mortgages — Mortgages, the most commonly used for purchases — settled closer to 6% than 7% and fit more buyers’ budgets.
“The interest rates are more favorable to first-time buyers. vellum mortgagetold Yahoo Finance.
At the same time, home prices are also softening, with the median list price at $400,000 December was down 11.1% from its June peak of $449,000, according to Redfin.
“Most of the activity is from new buyers,” says Reynolds. “In our downtown Seattle microclimate, most of the activities are really affordable. It is due to taking advantage of the situation, probably the first time.”
“Transaction Selection”
Returning buyers are also emboldened, knowing that the remaining sellers in the market are open to negotiation.
“In 2022, buyers set the market by bidding, which pushed prices up and basically forced them to pay to win,” said Downs. “Now, instead of waiting for listing prices to drop, buyers are offering big discounts and letting sellers make decisions. And it seems to be working.”
At least 16.6% of homes sold in December saw price cuts, up from 7.1% a year ago, according to Realtor.com data. Even homebuilders are squishy about prices.
One of Monte Miner’s clients took $15,000 off a new home that was originally priced at $409,000, according to realtors at Ironwood Fine Properties in Arizona.
“Buyers are back, but they’re picking deals. Let’s say a house is listed for $400,000 — a lot of the offers coming in are under that amount,” Miner says. “Pricing expectations for some sellers are as stuck in the past as they were three months ago.
Not only are some people making significant price cuts, they are also seeking concessions from sellers to further alleviate the burden of still-high home prices.
For example, at least 35% Percentage of builders that lowered home prices in December, according to data from the National Association of Home Builders. Another 62% of builders continue to use incentives to attract buyers, such as rate buydowns and payment points. According to Redfin, approximately 42% of homes sold The final three months of 2022 included seller concessions, including cash for repairs and closing costs.
“If we don’t have enough money for the closing costs, the sellers are willing to pay for it,” Downs said.
timing is everything
Now that interest rates are finally inching down, Downes says, it could be the perfect time to buy a home before the spring season hits full swing. By preparing for a pre-approval, setting a budget, and talking to a real estate professional, you are more likely to negotiate a better deal when you close.
According to Miner, entering the market before competition floods in can be a good move if you want to negotiate terms.
“From what I’ve seen, it feels like the bottom is here,” Minor said.
Gabriella is a Personal Finance Reporter at Yahoo Finance. follow her on her twitter @__gabriellacruz.
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