Like many sectors of the economy, buying and selling in the real estate market slowed down during the COVID-19 pandemic. However, by mid-August, the housing market is making a recovery quickly. Are you thinking about whether now is the best time to buy a house? Read on for an overview of trends in the housing market.
Buyer Demand Is on the Rise
The demand for homes has been increasing steadily year after year. While this growth slowed down during the lockdown, it’s recovering quickly. Due to a shortage of homes, record low-interest rates, and more active buyers, demand continues to rise.
Increased Buyer Competition
A few interrelated factors drive buyer demand. First off, there is a larger buyer population. This is leading to a more competitive market for buyers. Offers are made faster, and houses are quickly taken off the market. As demand grows beyond seasonal norms, the overall inventory volume is decreasing and furthering the competition.
Record Low-Interest Rates
Housing shortages and a larger buyer population are some of the factors driving demand. But another critical component driving demand is record low-interest rates. For some, this makes now the best time to buy a house. Many buyers are trying to move quickly to purchase property and snag these low mortgage rates.
Housing Supply Shortages
If you’re wondering if now is the best time to buy a house, you’ll also want to consider housing availability. Over the past several months, the rate of new listings on the market has slowed down. While houses are starting to be listed more frequently, folks are quickly buying up available property and shrinking the inventory.
Demand Outweighs Supply
The increased buyer demand means that new listings are taken off the market quickly. Compared to last year, the time that houses are on the market is 12 days faster (despite higher price tags). While this indicates a strong seller’s market, inventory volumes are declining. August’s national inventory declined by 36.4% year-over-year. Additionally, across the large real estate markets, inventory has dropped by 38.1%.
Current and Predicted Inventory Growth
Shortly after social distancing regulations began, the rate of new listings slowed. Compared to last year, inventory of newly listed properties is down 11.8%. While inventory growth is still very slow, economists predict that it will increase nationally and regionally due to strong buyer demand.
Housing Prices Keep Increasing
Before COVID, home prices were rising. During COVID, home prices rose. And now, they continue to rise. July marked 101 continuous months of year-over-year gains in the national median home price. Due to buyer competition and a shortage of homes, economists predict that prices will continue rising.
Prices Rise During COVID-19
Before the start of COVID, housing prices were increasing month after month. During the lockdown, prices rose, albeit a bit more slowly. Still, as of August 15, the median listing prices have grown 10.1% from last year. And for the first time, the national median home price surpassed $300,000.
Predictions for Housing Prices
While housing prices are higher than they have been, this could still be the best time to buy a house. Some economists suggest that housing prices could easily rise by 10% over the next two years. These predictions are based on high buyer competition, low-interest rates, a shortage of supply, and past trends.
Sales Are Recovering Quickly
During the pandemic, sales slowed down, and it’s taken nearly five months for them to make a full return to the housing market. However, their recovery has been fast. During July, sales sharply rebounded, with a monthly increase of 21%. This figure and others signify that housing is currently a strong seller’s market.
A Strong Seller’s Market
Due to high buyer demand, inventory is selling quickly. Currently, unsold inventory is sitting at a 3.1-month supply. This is down from 3.9 months in June and a 4.2-month figure in July 2019. During the lockdown, selling slowed, but it has rebounded fast. The pent-up demand drove home prices up during the summer months. In June, sales increased by 20.7% and by 24.7% in July. As of August, sales are at pre-COVID levels. In many markets in Oregon inventory levels are below 2 months supply.
Before COVID, sales had been steadily increasing. Compared to July 2019, there has been an increase in sales as a whole by 8.7%. Due to the trends in housing shortages and high competition among buyers, experts expect sales to keep increasing in the foreseeable future.
Deciding on the Best Time to Buy a House? We’re Here to Help
Growth in housing demand, asking prices, and sales have all recovered in the past two months. Given the current buyer demand, we expect new listings to catch up as well. As the housing market keeps evolving, we can help you navigate it. At Strategic Mortgage, we’ll provide you with the information you need to determine whether now is the best time to buy a house. And when you’re ready, we’ll be by your side so you can secure the housing you want. To set up an appointment, contact us today!