"It's not the best time to buy a house."
Real estate agent Jill Leberknight hears this a lot. And it makes sense, right? Home prices have skyrocketed in recent years, mortgage rates are too high, and properties move so quickly from listed to sold that there's seemingly no point in even dipping a toe into the housing market.
"But what I can tell you is I have never in 20 years seen as much buyer power as what buyers have right now," says Leberknight, an Austin-based real estate agent with eXp Realty.
A few new helpful trends in the housing market are giving buyers a boost this year, which means that if you're ready to buy a house, now could be a good time to do it.
How the housing market is shifting to help buyers
The prevailing sentiment that it's not a good time to buy a home has kept a lot of would-be buyers out of the market. Hannah Jones, a senior economic research analyst at Realtor.com, says that low affordability has pushed buyer demand way down, giving the housing market some room to recover from the breakneck pace of the pandemic.
"Buyer demand has pulled back really significantly, which has given the opportunity for inventory to come back online, to see an increase in inventory, [and] there's a little bit more market balance," Jones says.
During the pandemic, buyer demand went way up as mortgage rates dropped to historic lows. But the U.S. had a chronic housing supply problem made worse by COVID-19, which had many homeowners reluctant to sell and open their homes to strangers while the virus raged.
Now, lower buyer demand is helping the market heal.
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Inventory is going up
Inventory has been improving little by little for a while now. Home listings were up 30.6% year over year last month, according to Realtor.com's April housing trends report. This is the first time that the number of homes for sale in April has surpassed April 2020 levels.
The more homes there are in a given area, the better off buyers are. It gives them more options, reduces competition, and gives them leverage in negotiations with sellers.
Fewer buyers on the market means less competition for those who remain
"During the pandemic, my buyers had five minutes to get out and stand in line with 97 other people. We were writing offers on cars, and people had 15 minutes in a house and 15 minutes to make decisions," Leberknight says. "That was not sustainable and not healthy."
But now, buyers have room to breathe. Leberknight says that she actually has time to discuss homes with buyers, tour the neighborhood, gather information, and really weigh whether a property is right for them.
"You've got time, you've got options, you've got variety," she says.
Sellers are more willing to reduce their prices now
List prices — the price that sellers set their homes at when listing them for sale — are almost flat from this time last year, according to Realtor.com's report, but more sellers are reducing their prices as buyer demand has slowed and homes spend more days on the market.
"We will see price reductions continue to be sort of the norm, especially in markets that are really flush with inventory," Jones says. "So markets in the South and the Sun Belt, Texas and Florida, we see a lot of inventory in those markets."
Even with these improvements, there are still challenges
Still, there's no denying that affordability remains really tight, making it difficult or impossible for many folks to buy a home.
The good news is that there are ways to carve out a bit of affordability, like looking at smaller, starter homes and seeing if you qualify for any homebuyer assistance. Many mortgage lenders now offer things like grants or credits to help borrowers with their down payments and closing costs.
Your experience will also depend a lot on where in the country you are. Inventory in the South and West regions of the U.S. has "effectively recovered" from the pandemic, Realtor.com found, but it isn't up as much in the Northeast and Midwest.
If you're thinking about buying soon, talk to a real estate agent who's familiar with your local market. They can tell you how buyers are faring in your area and help you strategize how to get into a home affordably.
