A slower fall season in home buying may help more lingering home buyers to jump in.
Looks like prices are softening a bit. The median price of an existing home dropped for the second month in a row . The price reached $253,500 in August, after soaring to a record high of $263,300 in June, according to the latest data from the National Association of REALTORS®.
Approaching into the fall median sales prices typically decline. Summer is the hottest time of the market both timing wise and weather wise. Families want to be settled in before an upcoming school year. Homes that sell well in the fall tend to be smaller in size for folks with no children and tend to be less expensive.
Existing homes are proving to be a bargain compared to newer homes. The median price of a new home reached $313,700 in July, which is 23.7 percent higher than an existing home. That’s a huge gap.
Mortgage rates are still under the 4 percent psychological threshold, which can be a luring incentive for borrowers. Last week the 30-year fixed rate averaged 3.78 percent, holding steady at a 2017 low.
Studies have shown that fall can be the best time to buy. A recent study found that October was the best month for home buyers. Purchasers in October paid 2.6 percent below the estimated market value at the time for their home, according to the analysis. In other words, buyers interested in a $300,000 home tend to see a $7,800 discount on it in the fall. Oct. 8 was found to have the best day for bargains too, with an average of 10.8 percent below estimated market value, according to the study. This trend has been the same throughout my years of real estate practice. Even during the most recent housing market crisis.
August home sales started to decline heading into the fall season. Sales of existing homes fell 1.7 percent from July to August, but the National Association of Realtors (NAR) mostly blamed the decrease on the limited number of listings for sale on the market. Again this is another example of what happens every August. No new news to me nor my colleagues.
With less inventory properties are staying on the market for less time, so buyers will need to be ready to act fast. Fifty-one percent of homes sold in August were on the market for less than a month, according to National Association of Realtors (NAR). Properties typically stayed on the market for just 30 days in August.
Happy house hunting.