Real estate agent Mauricio Umanski says high mortgage rates, high prices and a lack of supply are creating difficulties for homebuyers in the Claman Countdown.
The crucial spring season for the housing market is well underway, and homeowners looking to sell can strategize the timing of their sale to maximize profits, according to a new report from Zillow.
Historically, May has been the best month to sell a home, according to a 2023 sales analysis conducted by the real estate firm. However, the situation changed completely after the shock of the pandemic. housing market.
Currently, June is considered to be the best time to sell a home for those who want to maximize the sale price. According to the study, homes listed in the first two weeks of June sold for 2.3% more than average, or $7,700 more than the typical home in the United States.
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Photos of homes for sale in Huntington, NY on August 5, 2020. (Photo by Thomas A. Ferrara/Newsday RM via Getty Images/Getty Images)
Before the pandemic, May was the best time to “consistently” be listed. Recent changes suggest that high mortgage rates are impacting demand, as is the spring influx of buyers.
“This year’s housing season is expected to follow a similar pattern to 2023, with the possibility of a second wave if the Federal Reserve cuts interest rates after mid-year,” the report said.
The sharp rise in mortgage rates over the past two years has created a “golden handcuffs” effect on the housing market. Sellers who locked in record-low mortgage rates below 3% at the start of the pandemic are reluctant to sell, leaving eager buyers with few options.
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Economists expect mortgage rates to remain high in the first half of 2024 and only begin to fall once the Federal Reserve begins cutting rates. Still, interest rates are unlikely to return to the low levels seen during the pandemic.
Mortgage buyer Freddie Mac said Thursday. Average interest rate for a 30-year loan This week, it rose from 6.79% to 6.82%. That’s down from a fall peak of 7.79%, but still significantly higher than the pandemic-era low of just 3%.
A sign outside a home for sale in Atlanta on September 6, 2023. (Photographer: Elijah Nouvage/Bloomberg via Getty Images / Getty Images)
Fluctuations in mortgage rates mean prospective buyers may jump in when rates drop or choose to wait and see when rates start to rise.
“Mortgage interest rate movements are seasonal as inventory remains low,” Zillow’s report said. “First-time home buyers on the verge of qualifying for a mortgage could enter or exit the market depending on interest rate developments.”
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According to another report published by Realtor.com, the supply of available housing is still down an astonishing 34.3% compared to normal supply before the start of the COVID-19 pandemic in early 2020. ing.
Another Zillow study found that most homeowners say they are nearly twice as likely to sell their home if the mortgage rate is 5% or higher.
Approximately 80% of mortgage holders have interest rates below 5%.
