The market has been unpredictable, and the delta variant is only one of RE’s wild cards. Still, most experts don’t expect sales to slow much as summer turns into fall.
CHICAGO – Will bidding wars continue? Will home prices stay elevated? Will homebuyer demand remain strong? Heading into the fall season, economists are optimistic about the market’s direction considering its unpredictability since the beginning of the pandemic.
For the most part, they agree it won’t be a return to the usual slowing pace of sales in the fall – nor will prices slide as much as they usually do when families settle into a new school year.
The fast-spreading delta variant of COVID-19 remains a wild card for the housing market, but, at the moment, “I expect an unusually busy fall season,” says George Ratiu, realtor.com’s chief economist. “Sellers are putting homes on the market. Normally, this activity happens early in the spring.”
The National Association of Realtors®’ (NAR) latest housing report finds that housing inventories are increasing, up 7.3% in July compared to June. A greater number of homes for sale will lessen the intensity of multiple offers, says Lawrence Yun, NAR’s chief economist.
“We’re seeing the gap narrowing between demand and supply,” adds Gay Cororaton, NAR’s director of housing and commercial research. However, “there’s still a huge, huge gap.”
Buyers continue to purchase homes at a frantic pace, and 89% of homes sold in July were on the market for less than a month, according to NAR’s data.
Hopeful buyers welcome inventory increase
Buyer demand likely will remain strong, especially as mortgage rates stay near record lows.
“The fear of missing out on what could be a once-in-a-lifetime deal will likely entice additional buyers,” realtor.com reports. The 30-year fixed-rate mortgage averaged 2.87% this week, according to Freddie Mac.
Even with an increase in listings, homebuyers will likely still face intense competition.
“Don’t expect deals in the fall if you are house hunting in the most desirable part of a market or competing for a particularly nice house,” says Ali Wolf, chief economist at Zonda, a building consulting firm. “Homes that stand out for one reason or another are still flying off the shelf.”
The fall housing market will still be very strong, agrees Greg McBride, chief financial analyst at Bankrate.com. “It just won’t be as frenetic as what had been experienced earlier in the year.”
Source: “The Housing Market Continues to Cool. What Will This Fall Be Like?” realtor.com® (Aug. 25, 2021)
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