Unfinished home sales fell in June, which means the housing market could cool off

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22

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There was a huge demand for the purchase of a new home since mortgage rates hover around record lows for most of the year. But in June, unfinished home sales fell 1.9% from May, according to the National Association of Realtors. And that could be a sign that the housing market is finally starting to calm down.

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Will buyers soon be enjoying lower home prices?

Pending home sales refer to sales contracts for the purchase of a home that have been signed but not yet closed, and this is an indicator of the strength of the housing market. At the moment, house prices are at an all-time high, but this has deterred many buyers.

In May, housing prices increased by 17% compared with the previous May, according to the S&P Case-Shiller National Home Price Index. This represents the largest annual gain on record, and may explain why unfinished home sales fell in the past month.

Of course, the shortage of real estate was also a problem. In fact, the main reason for the soaring house prices this year is that buyers were short on properties to choose from. What happens is that buyers are buying out the same restricted homes trying to interrupt each otherand rising house prices.

Realtor.com is now reporting that the number of newly listed homes for sale in June is up 5.5% compared to June 2020. But overall, inventories are still well below normal levels. And therefore, it is very difficult for today’s buyers to navigate this market.

Should you buy a home right now?

Given current home prices and the amount of competition in the market, now is not the right time to buy, even with mortgage rates so competitive. But if inventories start to slowly increase and buyers become more conservative about how much they will pay for a home, then the situation could improve later this year.

If you have a good reason buy a house now – let’s say your lease is about to expire and you don’t want to renew it for another year – then you can continue looking for a home. Otherwise, it would be nice to sit for a while.

There is a good chance that mortgage rates will remain competitive in 2022, and possibly beyond. Or to put it another way, if you get out of today’s tough housing market and wait it out, you don’t necessarily lose the chance to lock in a competitive home loan interest rate. However, you can save yourself some stress by not paying extra for a house that usually sells for a lot less.

Plus, waiting for more items to hit the market means you’re less likely to settle for a home you don’t like. That alone makes the wait worthwhile.

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