In a surprising turn of events, the median price of homes for sale experienced a 0.9% annual drop in June, marking the first decline in six years, as reported by Realtor.com. Additionally, the median listing price per square foot continued its downward trend for the second consecutive month. This news has caught the attention of potential homebuyers and industry experts alike.
Realtor.com’s comprehensive report highlighted a noteworthy shift in the housing market. While the median asking price for homes grew seasonally, there was an unprecedented year-over-year decline in the median list price – a phenomenon not witnessed since 2017. The dwindling supply of affordable homes has created a volatile market, where homebuyers face fierce competition and limited availability.
The scarcity of available homes for sale is evident as the number of listings in June plummeted by a staggering 15%, hitting an all-time low. This decline is the most significant drop experienced in two years, according to a comprehensive report by Redfin. The severe shortage of housing options has resulted in potential homebuyers being locked in a heated market with few options to choose from.
Despite the challenging conditions, pending home sales saw a glimmer of hope, increasing by 1.9% in June compared to the previous month. This marks the highest level of pending sales since the fall season. After a continuous decline for 16 months, pending sales have been climbing steadily over the last three months, providing a ray of optimism for the real estate industry. However, it’s important to note that pending sales still experienced a 16.2% year-over-year decline in June, although it was the smallest annual decline in a year.
The current market conditions have significantly impacted the average number of days a house spends on the market. In June, houses stayed on the market for 29 days on average, a stark contrast to the mere 11 days seen the previous year, as highlighted in the Redfin report. The shortage of housing options has led to a situation where well-priced homes in desirable locations attract multiple offers despite the limited number of buyers.
Amidst the uncertainty, mortgage rates have played a pivotal role in influencing potential homebuyers’ decisions. Although inflation has been cooling down, mortgage rates are expected to gradually decrease. Redfin suggests that while the decline may not be drastic enough to attract a critical mass of buyers, it still presents opportunities for those in search of the right mortgage rate. To find the best deals, homebuyers are encouraged to shop around and explore options from different lenders.
For those aspiring to become homeowners, raising their credit score can prove to be a crucial step in accessing favorable mortgage rates. Many lenders rely on credit rating systems, such as the FICO scoring model, to evaluate borrowers’ creditworthiness. Higher credit scores generally lead to better rates across various financial products, including mortgages, credit cards, and auto loans.
To boost their credit scores, potential homebuyers can take several steps. Firstly, they should regularly check their credit reports from TransUnion, Equifax, and Experian, which can be accessed for free once a year. Identifying areas that need improvement and disputing any discrepancies, such as fraudulent accounts, can be beneficial.
Another key factor in credit score improvement is maintaining a track record of timely payments on credit cards, utility bills, and other financial obligations. Additionally, reducing high-interest debt and avoiding taking on new credit can have a significant positive impact on credit scores.
Experian advises those planning to buy a home in the near future to take proactive steps to improve their credit profile, as it can increase their chances of qualifying for a mortgage and reduce the overall interest rate on the loan.
In conclusion, potential homebuyers are navigating a cooling housing market with limited supply and fierce competition. While the median price of homes for sale experienced a decline, pending home sales have shown signs of improvement. To secure the best mortgage rates, homebuyers should focus on improving their credit scores and take advantage of the opportunities presented by the gradual drop in mortgage rates.
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