Buyers in today’s real estate market are struggling with housing shortages. But something in this respect opens up new horizons.
Total housing stock rose marginally to 1.25 million units in June and supply by 2.6 months, a slight increase from the 2.5-month supply in May, according to the National Association of Realtors. This, in turn, led to an increase in secondary home sales, which were up 1.4% compared to May. But what’s more impressive is that they are up 22.9% over last year. This is a clear sign that the supply has increased.
However, housing stocks at the end of June were still down nearly 19% from the previous year. Thus, today’s buyers can still face their fair share of problems trying to navigate the current real estate market.
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Is this a good time to buy a home?
In terms of inventory and pricing, this is actually a pretty bad time to buy a home. While the fact that inventories rose in June is good, the 2.6-month home offer still gives sellers an edge over buyers. A 4-5 month supply of homes is required to give buyers more bargaining power.
Moreover, due to the fact that the supply as a whole is still declining, house prices have risen. In June, the average price for an existing home was $ 363,300. That’s 23.4% more than in June 2020, when the median home price was $ 294,400. In addition, the rise in prices was widespread – in June, prices rose in all regions of the United States.
Thus, buyers who are trying to buy homes today are likely to end up paying much more than usual and taking on a higher price. mortgage as a result. The good news is that mortgage rates are still at a competitive level and this could help offset higher house prices. But that may not be enough to make modern homes available to buyers on a budget.
The positive side of waiting
Many people are looking to buy homes in the near future to capitalize on today’s attractive mortgage rates. But those rates are likely to remain low not only until the end of the year, but also until 2022. And with housing inventory growing slowly but steadily, it may be beneficial for buyers to sit and watch how this gradual increase affects home prices.
We just saw the supply of affordable homes grow from 2.5 months in May to 2.6 months in June. It may be that the July figures are 2.8 months of homes, and by August we are at the 3-month supply mark.
If that happens, these modest spikes will make a difference over time, so it might make sense for some buyers to pause their search for a home and resume later this year or even 2022. If you’re lucky, an increase in supply will lead to lower home prices, so buyers have more options – and they don’t have to spend so much money to own a piece of property.