US real estate market slows down based on new reports and data

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The US real estate market appears to be slowing down. But how will this affect home buyers in the future?

Numerous recent reports suggest that the US housing market is finally starting to slow down a bit. This happened after a year of frantic buying activity and a sharp rise in prices.

But what does this mean for future home buyers? Will it be easier to buy a home later this year or in 2022? Here’s a rundown of the latest housing market reports and their implications for US buyers.

Officially: the real estate market is slowing down

Over the past 12 months or so, the US real estate market has accelerated and strengthened like never before. Even a global pandemic couldn’t slow down the home buying rush in cities across the country. Suddenly, people began to value home ownership again.

In addition, thousands of people moved from crowded cities to larger suburbs and rural housing markets. These factors, coupled with record low mortgage rates, boosted the U.S. housing market in the second half of 2020 and the first half of this year.

This brings us to the present.

Several recent reports indicate that the US real estate market may finally cool off a bit. We are seeing a decline in home sales, an increase in inventories and other indicators that indicate a slowdown in the growth of the housing market.

Earlier this month, the US Census Bureau released an update on US home sales. According to this report, sales of new private homes fallen by 6.6% in June compared to May. Sales of new buildings fell by more than 19% annually compared to last year.

Likewise, a July 2021 report from the National Association of Realtors showed an almost 2% drop in unfinished sales of existing homes from May to June this year.

So what’s going on here? Why have sales dropped in recent months? Why is the US real estate market slowing down after so many months of excessive activity?

Buyers get the price and refuse

There are several overlapping factors that could cool the real estate market in 2021.

First, there is a rapid and unprecedented rise in housing prices. In most cities across the country, house prices have risen to record highs over the past year. This trend has left many buyers feeling shocked, while others have completely withdrawn from the market.

There is also a persistent supply shortage that could affect home sales across the country. This is especially true when it comes to new buildings. Builders across the country are currently struggling with labor shortage and high prices for lumber, among other things.

But this pricing A factor more than anything else will lead to a slowdown in the growth of the real estate market in the summer of 2021.

Polls show home buyers across the country are tired, frustrated, and weary of the hyper-competitive nature of the housing market. In many US cities, home prices have risen in double digits over the past year. Some of the most popular housing markets are seeing nearly 30% annual price increases. or more – only for the last 12 months.

You don’t need to be an economist to understand how this could cause a slowdown in the real estate market in 2021.

Accessibility issues have led to an increasing number of home buyers leaving the market. Due to the rapid rise in prices, fewer people can afford to buy a home today than they did a year ago. So we’re talking about a slow but steady decline in the number of qualified and willing home buyers.

Stocks have risen in many US cities

Inventory levels also play a role. And big.

Over the past couple of years, most housing markets across the country have suffered from severe supply shortages. There are many home buyers on the market … not enough properties to do without. You’ve heard this before.

But that seems to be changing. According to a July 2021 report from Zillow, housing stocks in the housing market have surged across the country over the past year.

“Inventories for sale are recovering markedly for the second month in a row, up 3.1% from May,” they said in a report.

Of course, real estate conditions can vary greatly from one city or region to another. In some cities in the US, housing stocks are still shrinking. But they are the exception rather than the rule. In most of the United States, housing supply is starting to grow.

The rise in inventory becomes even more evident when you look at the number of newly listed homes for sale in housing markets across the country. New listed properties across the country rose 10.9% from May to June, according to a recent report from Realtor.com. New listings are up 5.5% year over year.

So there’s a lot going on here. Rapidly rising house prices continue to shrink the pool of buyers. Stocks in many US cities are starting to rise. And it looks like the US real estate market may finally slow down.

What does all this mean for home buyers?

For the most part, this is good news for US home buyers.

If these trends continue, it will be easier for buyers to find and purchase a home later this year and into 2022. They may not have to compete as fiercely with other buyers. They may not have to waive contingent contractual obligations or make list price proposals.

In other words, we can go back to something like “normal”.

But we haven’t reached the goal yet. While the real estate situation appears to be slowing down in the second half of 2021, most US cities are still experiencing seller market conditions. And these conditions could well postponed to 2022… It will take time for the supply and demand situation to truly balance.

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