Homebuyers get your preapprovals up to date and get your Realtor ready. As Anthony mentioned in his recent market update video, the best time to buy is just about here. The second wave of inventory for the year is about to hit the market but what makes this wave better than the spring wave is the fact that there are fewer buyers out there competing for the home you want.
Take a look at the graph below. Spring sellers have been enjoying themselves because there have been fewer homes on the market competing for a buyer’s attention. The white line represents this, showing a lower inventory than we’ve seen in years. But what’s about to happen is the trend line is about to spike up. An increase in inventory means more homes for current buyers to choose from. The red circle is the trajectory for inventory this year so that bump is where it becomes a buyer’s market.
Fewer buyers competing for this second boom in inventory means that sellers have to be prepared for fall sales and potentially offer buyers more of what they want to make the sale. That may mean a quicker or longer closing or a lower sale price than a seller would have achieved in spring.
As you can see in the graph above, the beginning of October is always higher in inventory than the end of August, but last year was much higher. This is a common trend year after year despite the market.
Not only is the market about to swing into the buyer’s favor, but interest rates have been gliding buyers into a premier position as they’re the lowest we’ve seen in well over a year. Interest rates took an unexpected turn in the spring when they decreased instead of spiking like popular predictions at the beginning of the year and buyers have benefited ever since. As you can see the graph below, rate trends are diminishing as the year progresses.
With rates at the level they’re at, buyers have even more money to spend on a home. It costs less to obtain a mortgage with lower rates, so in the fall buyers not only have more negotiating power but this fall they can afford more of a home.
Buyers should get themselves ready to hit the ground running right after Labor Day. The amount of homes listed on the market is going to increase significantly giving buyers the one thing they always want no matter what time of year it is: a big selection. And with less expensive mortgages due to lower interest rates, there’s never been a better time to buy in recent years!