What to Expect From the Housing Market This Summer
Summer is usually the busiest season of the year for buying and selling houses. The warmer weather and greener yards make it easier to maximize curb appeal, host open houses, and conduct showings. Also, homebuyers are usually anxious to settle into a new home before the school year starts, so there is a push to close on new properties during the summer months.
As it gets closer to this peak real estate season, what are some trends people should be watching for in the housing market?
Home Prices Will Decline
Most industry insiders expect home prices to dip a little over the summer. Home prices peaked over the last couple of years as mortgage rates dropped. As rates have climbed, prices have come down, but they are still above pre-pandemic levels. Of course, this trend is very location dependent as some areas of the country may actually see home prices rise. In general, however, buyers should expect to see prices soften a bit.
The Market Will Shift to Favor Buyers
It’s been a seller’s market for the last couple of years, but that is shifting. Higher mortgage rates are crowd-controlling the market, inventory is going up, and home prices are coming down, putting an end to the bidding wars many homebuyers were fighting during the pandemic. For sellers, this means they will have to put more effort into ensuring their properties are priced accordingly to move and are attractive to buyers.
Mortgage Rates Will Remain High
Overall, industry experts expect interest rates on mortgages to remain relatively stable to where they are now. As of May 9, 2023, a 30-year fixed-rate mortgage is 6.875 percent. At best, it’s possible it will dip as low as about 5 percent, but most expect it to hover between 6 and 7 percent. This is lower than its peak of over 8 percent in 2022 but much higher than its low of 2 percent. Any fluctuations will impact the housing market over the summer.
The Housing Market Won’t Collapse
There has been a lot of chatter around the fear of another housing market crash like that of 2008. Industry insiders overwhelmingly agree this won’t happen. They explain the current fluctuations in prices and rates as a normalization or correction of the market after the roller coaster last few years.
There’s no way to say for sure what the summer will bring for real estate. When trying to decide whether the next few months are the right time to buy or sell property, homebuyers and home sellers should stay informed and seek out the advice of a licensed real estate agent to help them navigate the market fluctuations.