{"id":4899,"date":"2024-03-19T21:58:26","date_gmt":"2024-03-19T21:58:26","guid":{"rendered":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2024\/03\/19\/the-best-of-both-worlds-the-spring-housing-market-might-just-change-everything-for-homebuyers-and-sellers\/"},"modified":"2024-03-19T21:58:26","modified_gmt":"2024-03-19T21:58:26","slug":"the-best-of-both-worlds-the-spring-housing-market-might-just-change-everything-for-homebuyers-and-sellers","status":"publish","type":"post","link":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2024\/03\/19\/the-best-of-both-worlds-the-spring-housing-market-might-just-change-everything-for-homebuyers-and-sellers\/","title":{"rendered":"\u2018The Best of Both Worlds\u2019: The Spring Housing Market Might Just Change Everything for Homebuyers and Sellers"},"content":{"rendered":"

<\/a><\/p>\n

Getty Images \/ Realtor.com<\/p>\n

<\/p>\n

It\u2019s not just the temperatures that are warming up right now.<\/p>\n

If you didn\u2019t already know, spring is the start of the busiest homebuying period of the year<\/a>. Houses ooze curb appeal with early flowers in full bloom. Buyers don\u2019t mind trudging to open houses in nicer weather. And families start scouring home listings, hoping to move in just a few short months when the kids are out of school.<\/p>\n

This spring is also the housing market\u2019s make-or-break moment, coming a year after high list prices and mortgage rates\u2014and a lack of available properties\u2014stalled home sales<\/a>.<\/p>\n

So what should homebuyers and sellers expect this season? Will asking prices and mortgage rates finally ebb? Will more homes come onto the market? Will sellers have to\u2014gasp<\/em>\u2014negotiate? Or will a proposal<\/a> by President Joe Biden<\/strong><\/a> to make housing more affordable nip the spring market in the bud?<\/p>\n

\u201cWhere we are right now is the best of both worlds. Price increases are slowing, which is good for buyers, and prices are still relatively high, which is good for sellers,\u201d says Realtor.com\u00ae<\/a> Chief Economist Danielle Hale<\/strong>.\u00a0\u201cThere are some optimistic signs, but we haven\u2019t seen that yet translate into more sales.\u201d<\/p>\n

She expects sales will be better than in 2023, but they will be down from the surges seen during the COVID-19 pandemic and from a more typical year.<\/p>\n

\u201cWe\u2019re moving in the right direction,\u201d says Hale.<\/p>\n

One positive sign for the housing market is that Americans are more optimistic about buying and selling homes, according to Fannie Mae\u2019s Home Purchase Sentiment Index<\/a>. About two-thirds of consumers, 65%, said it was a good time to sell a home in February.<\/p>\n

However, just 19%<\/em> of folks said it\u2019s a good time to purchase a home, according to the index. And that was an increase from 17% in January.<\/p>\n

That\u2019s because housing is still incredibly expensive. Nationally, list prices clocked in at a median of $415,500 in February<\/a>, according to the most recent Realtor.com data. Mortgage rates also remain high, averaging 6.74% in the week ending March 14, according to Freddie Mac<\/a>.<\/p>\n

\u201cThe housing market is at a stalemate with high rates,\u201d says\u00a0Devyn Bachman<\/strong>, chief operating officer at John Burns Research & Consulting, a company that works with builders. \u201cUntil something changes, we\u2019re kind of stuck where we are.\u201d<\/p>\n

Good news for buyers: More affordable homes are coming<\/h2>\n

The number of homes priced between $200,000 and $350,000 shot up 20.6% year over year in February.<\/p>\n

Realtor.com<\/p>\n

The best news for buyers this spring is more\u2014and cheaper\u2014homes are going up for sale.<\/p>\n

There were nearly 15% more homes for sale<\/a> in February than a year earlier, according to Realtor.com data. That alone could jolt the housing market a bit if more \u201cFor Sale\u201d signs continue to appear. However, the nation is still suffering from a housing shortage<\/a> even with all of that new inventory.<\/p>\n

Many homeowners chose to stay put to hold on to the ultralow mortgage rates they locked in during the pandemic. But now, they might be starting to move, even if they have to stomach a higher mortgage rate to do so.<\/p>\n

\u201cListings are up a bit as life events and job changes are putting increasing pressure on locked-in homeowners to sell their homes,\u201d says Mark Zandi<\/strong>, chief economist at Moody\u2019s Analytics. \u201cHomeowners may also be slowly coming to the realization that mortgage rates aren\u2019t going back anywhere near the rate on their existing mortgage.\u201d<\/p>\n

Buyers can also rejoice in more inexpensive homes going up for sale. The number of properties priced between $200,000 and $350,000 shot up 20.6% year over year in February.<\/p>\n

More than half of these less expensive homes, or 55.5%, were in the Southern region of the country.<\/p>\n

\u201cThe biggest need for homes is in those lower-priced categories,\u201d says Hale. \u201cWe\u2019re starting to see the market give buyers the choices they can afford.\u201d<\/p>\n

More home sellers are also cutting prices. About 14.6% of all homes on the market underwent a\u00a0price reduction<\/a> in February, up from 13.2% in February of last year.<\/p>\n

Buyers shouldn\u2019t get too comfortable, though.<\/p>\n

\u201cSpring is always more active than the rest of the year. We\u2019re more likely to see bidding wars and above-ask offers in spring than in other seasons,\u201d says Hale. However, \u201cthere will be less of that this year.\u201d<\/p>\n

Mortgage rates are a wild card this spring<\/h2>\n

The success of the spring selling season might hinge on which direction mortgage rates head next<\/a>.<\/p>\n

They came down from nearly 8% last fall to the 6% range in mid-December. This was thanks to the U.S. Federal Reserve\u2019s plans to cut interest rates, which would likely result in lower mortgage rates as well.<\/p>\n

But with inflation stubbornly remaining above the Fed\u2019s 2% target, the Fed may choose to keep its rates higher for longer. That is expected to keep mortgage rates high as well.<\/p>\n

\u201cThere will be more of a roller coaster in mortgage rates<\/a> than previously expected,\u201d says Hale. \u201cBuyers are going to have to stay on their toes and be prepared to adjust.\u201d<\/p>\n

This time around, however, buyers might be more willing to accept a higher rate on a mortgage they can refinance when rates come down.<\/p>\n

When rates first started rising rapidly in 2022, many found the prospect of a mortgage rate in the high 6% range financially terrifying. But after rates almost hit 8% last fall, they\u2019re looking a lot better to many aspiring homeowners.<\/p>\n

\u201cBuyers and sellers have come to terms with these higher rates,\u201d says\u00a0Lisa Sturtevant<\/strong>, chief economist of Bright MLS, which covers the mid-Atlantic region of the country. \u201cI do think we\u2019re going to see them above 6% for the rest of the year.\u201d<\/p>\n

Even if rates do drop, home prices could potentially rise to make up the difference. That\u2019s because more buyers will jump into the market, making it even more competitive. That could lead to more bidding wars and offers over the asking price.<\/p>\n

President Biden might have threatened the success of the spring market<\/h2>\n

One of President Joe Biden\u2019s housing proposals would offer middle-class homebuyers tax credits of up to $5,000 for two years.<\/p>\n

Getty Images<\/p>\n

The housing proposals<\/a> Biden unveiled at the State of the Union, which are designed to make housing more affordable, could also inadvertently endanger the spring market.<\/p>\n

Biden, the Democratic Party\u2019s 2024 presumptive nominee, would like to offer middle-class homebuyers tax credits of up to $5,000 for two years and middle-class homeowners tax credits worth up to $10,000 if they sell starter homes to other owner-occupants.<\/p>\n

\u201cPresident Biden\u2019s proposals are just proposals and unlikely to become law, at least not anytime soon,\u201d says Zandi.<\/p>\n

However, many potential buyers and sellers might still hold off on entering the market.<\/p>\n

\u201cThey might wait until they can get the tax credit money instead of moving ahead with plans,\u201d says Hale. \u201cIt could cause a temporary drop in housing demand.\u201d<\/p>\n

Bidding wars and offers over the asking price could return<\/h2>\n

Despite high home prices and mortgage rates, buyers are expected to face a lot of competition over a still-limited number of homes for sale.<\/p>\n

\u201cHomes that are turnkey and in a good school district will be in high demand, meaning there will probably be bidding wars,\u201d says Ali Wolf<\/strong>, chief economist of the building consultancy Zonda. \u201cThey will sell above asking price.\u201d<\/p>\n

However, real estate experts don\u2019t predict a repeat of what we saw during the pandemic.<\/p>\n

\u201cI don\u2019t think we\u2019re going to see a return of buyers having to offer up their firstborn child to get a home,\u201d says Sturtevant. \u201cSellers are still going to have the upper hand, but they\u2019re going to have to negotiate.\u201d<\/p>\n

Sturtevant is seeing more seller concessions in the mid-Atlantic region. About a quarter of all sales included sellers providing the buyers with some cash for their closing, buying down their mortgage rates, or kicking in some money for repairs.<\/p>\n

\u201cFor someone who is willing to accept an older home that needs more work, there is a bit more negotiating power,\u201d says Wolf. \u201cThere will be opportunities for negotiating this spring season.\u201d<\/p>\n

The post \u2018The Best of Both Worlds\u2019: The Spring Housing Market Might Just Change Everything for Homebuyers and Sellers<\/a> appeared first on Real Estate News & Insights | realtor.com\u00ae<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Getty Images \/ Realtor.com It\u2019s not just the temperatures that are warming up right now. If you didn\u2019t already know, spring is the start of the busiest homebuying period of the year. Houses ooze curb appeal with early flowers in full bloom. Buyers don\u2019t mind trudging to open houses in nicer weather. And families start…Read More→<\/a><\/p>\n","protected":false},"author":0,"featured_media":4900,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4899","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/4899","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/comments?post=4899"}],"version-history":[{"count":0,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/4899\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media\/4900"}],"wp:attachment":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media?parent=4899"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/categories?post=4899"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/tags?post=4899"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}