It’s no secret that supply and demand is the bread and butter of the housing market. Recently, Lawrence Yun, chief economist for the National Association of REALTORS ® (NAR), noted that the current housing market is at an interesting juncture, with rising inventory but lower buyer demand. Even as more homes arrive on the market, home buyers don’t seem to be in a rush to make a purchase. According to NAR’s newly released Pending Home Sales Index, during May 2024, pending home sales fell by 2.1% compared to April 2024 and were down 7% compared to May 2023. What’s interesting it’s that this decrease in pending sales has occurred while inventory continues to rise, with more houses being listed on the market. For context, the housing markets total inventory (aka, it’s supply) was up nearly 19% this May compared to 2023 numbers.
What does this mean for you?
Our ****previous post established that pricing has always been paramount for prospective sellers, but the current housing market makes it more important than ever for prospective sellers to determine a fair, accurate price before they list their home on the market. According to NAR, the recent decline in home sales could in part be due to rising home prices and higher mortgage combined, which are keeping some buyers on the sidelines. For context, the median-existing home sales price in the U.S. surged to the highest number ever recorded in May at a value of $419,300, and mortgage rates have reached a high of 7%.
The Future of the Housing Market
While NAR has predicted mortgage rates will remain above 6% throughout 2024 and 2025, there is still a significant unmet demand within the housing market, and mortgage rates are expected to moderate in the coming months, which should bring more buyers into the market.
The point is, the future of the housing market is bright, with economists predicting a robust housing market for the remainder of 2024 and 2025. And while the market didn’t meet pending sales expectations in this latest report, it exceeded expectations in terms of prices. Low inventory and demand among buyers remaining in the buyer pool are keeping prices on an upward trajectory.
Home sales are projected to increase. But an experienced real estate professional can help you maximize your profits.
Sellers are facing a unique opportunity in the market right now. With higher inventory and lower demand, the right price is more important than ever. As buyers hesitate to finalize a sale due to high prices and increasing mortgage rates, the right home with the right price has even more of an impact on buyers than it ever did before. Therefore, prospective sellers need to ensure they are pricing their home fairly and accurately in order to get a leg up in the market. And that’s where real estate agents come in. Pricing is tricky, and in today’s housing market, it’s vital to consult with real estate professionals who are aware of the complexities behind pricing and the strategies that can help ensure a fast, successful sale.
The bottom line is, as prices stabilize and demand increases, working with an agent to price your home correctly is one way to ensure you remain competitive in the market, and attractive to prospective buyers.
Interested in booking your complimentary seller’s consultation? Contact me and let’s schedule yours today!
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Andrew Manning • REALTOR® • Berkshire Hathaway HomeServices California Properties • DRE: 00941825 • 818-380-2147 • andrew@andrewmanning.com