The housing market has been sending mixed signals in recent months, with existing home sales rocketing back in May from spring lows. But even with many buyers treading cautiously, Realtor.com Chief Economist Danielle Hale says there are growing signs bidding wars could be coming back in the fall.
The inventory of homes coming on the market has been growing at just under 3%, way below the 6% rate from the start of the year.
“If that declining growth trend continues, we could see maybe this fall that we’ll have fewer homes available for sale than last year,” Hale told Yahoo Finance’s “The First Trade.” “That does make competition a bit more fierce for buyers, it gives them fewer options to choose from, and it’s going to make the market a little but more difficult than it has been so far this year.”
Hale says lower inventory could juice the market in a way low mortgage rates have so far not been able to. Realtor.com says the national average for a 30-year fixed rate mortgage is now 3.91%, near recent lows. That alone could be keeping potential buyers from pulling the trigger, she says.
“As long as mortgage rates are moving down there’s really no urgency on the part of buyers,” Hale told Alexis Christoforous and Brian Sozzi. “They can wait for better rates on the horizon.”
“Mortgage rates now have come down pretty dramatically from where they were at the end of last year, but they’re still about half-a-percentage point above where they were when we hit all-time lows seven years ago,” she said.
Her advice for buyers: “Be patient.”
“Make sure you know what you want, and be patient until you find it, but take advantage of those mortgage rates that are definitely low right now.”