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- More buyers have gotten back into the market as mortgage rates dip from last year’s high.
- Sellers are still reeling from the market slowdown late last year and are more willing to negotiate.
- Insider spoke with a house hunter who feels that now is a good time to jump in and buy a home.
Justin Moore, 50, and his wife have been dreaming of buying a home in Florida for many years.
The family felt the time was finally right last fall with a son recently accepted at Rutgers University, and their middle daughter going to play softball at Florida Southwestern State. But the real estate market was quickly moving against them as mortgage rates skyrocketed over 7%, and home prices were stubbornly high.
Frustrated, they took a break from looking.
This month, they’re already back at it, Moore said. After 11 consecutive months of existing home sales declining, sellers are more open to negotiating on price. Additionally, 30-year mortgage rates are nearly a full percentage point off their peaks, with further declines forecast. These are motivating factors for Moore, especially as he’s tired of renting and “living in somebody else’s house.”
“Ideally, you want to have a place to call your own,” Moore said.
His family is not alone. Thirteen percent more buyers told Redfin agents ready to begin the process of purchasing a home compared to the trough in November, and some 28% more have applied for a mortgage since then, the online real estate marketplace reported on Wednesday.
“There has been a massive market shift,” Alexandra Shupe, a real estate agent in Brevard County, Florida, said about her market. “We went from sellers controlling everything, to now being more of a neutral, and even almost a buyer’s market.”
Buyers are taking note. Mortgage broker Jennifer Beeston of Guaranteed Rate was stunned by the interest she is seeing from potential homebuyers as a result, she said.
“We were not expecting it. Usually January is the month you take naps,” she said in a video posted to her YouTube channel last week. “This year it is gangbusters. People are ready to buy a house.”
For the past few years, the housing market has been a portrait of economic extremes. A year-and-a-half of frenzied demand — propelled by a low-interest environment, low supply of available properties, and Americans relocating during the pandemic — pushed prices up north of 50% in some cities. Then, as the Federal Reserve stepped up efforts to quell inflation, long-term mortgage rates hit their highest point in more than two decades, triggering a quick and dramatic market slowdown.
Now, as inflation and mortgage rates begin to ease, and some housing markets have cooled, buyers are in a better mood and have an upper hand on sellers suffering the chill of the last year. The average 30-year mortgage rate was 6.13% in the past week, according to Freddie Mac.
Those looking for a new home are in a good place to cash-in on the perks of a buyer’s market right now, Shupe said. In negotiating deals for buyers, she said she’s asking sellers to pay fees that result in lower mortgage rates for the buyer. She encourages buyers to make offers “significantly under” asking price and request other concessions.
One sticking point for buyers is that sellers have stepped back. Redfin data shows the number of sellers jumping into the market is up 10% since November, but new home listings are still down because sellers are waiting for the market to turn back in thier favor.
But to Shupe, it means the market is just not at the extremes that bookended the past year.
“We’re kind of in more of a normal market, sort of that we were in pre-2020,” she said.