The housing market in the United States is showing signs of hope for homebuyers, according to a new report.
According to real estate company Redfin, monthly housing payments are at their lowest in four months. At the end of July, the typical monthly housing payment for a U.S. home was $2,671, which is the lowest in four months. Decreasing mortgage rates are a direct cause of this. As of July 25, Freddie Mac reported that a 30-year fixed mortgage rate currently sits at 6.78%, down 0.17% from the beginning of the month.
Even with the dip in costs, real estate agents say there are other factors keeping potential buyers from entering into a contract.
“I’m working with several buyers who are waiting for the election before they make a move,” Matthew Purdy, a Redfin Premier agent in Colorado, said, according to the report. “Some of them say they’ll only buy a home if their candidate wins. Others are waiting because they feel the economy and housing market are shaky, and hope it will improve after the election. I am working with a few foreign buyers who are wary about investing any more money in U.S. real estate before they see who takes office.”
In May, an annual Gallup Survey found that inflation (41%) and the housing market (14%) are the biggest financial burdens facing American families. With housing being a driving factor of rising inflation, these hot-button issues continue to be political ones, especially in a presidential election year.
Earlier this year, President Joe Biden told a crowd in Las Vegas, “We know affordable housing has been a challenge for a long time. To solve it long term, we have to increase supply, because when supply is down and demand is up, costs rise.”
“The bottom line to lower housing costs for good is to build, build, build,” he added.
Biden’s most recent action, the Biden-Harris Housing Plan, which “calls on corporate landlords to cap rent increases at 5% and takes action to make more public land available for housing,” has received criticism from real estate experts.
It’s a seller’s market
The country’s housing shortage took a hard hit in 2022, rising to a 4.5 million deficit.
According to Zillow, “2023 was the strongest year for U.S. home completions since 2007, but 1.4 million additional homes aren’t enough to make a meaningful dent in the nation’s existing housing shortage due to the increase in the number of families.”
However, even houses that are on the market are struggling to get buyers’ attention.
According to Bankrate, a Utah home stays on the market for an average of 35 days, up five days from the year before. High interest rates and unaffordable home prices make it a seller’s market.
Another Redfin report found that nearly two-thirds of homes for sale in June remained on the market for longer than 30 days.
“Overall, the market is fairly stagnant,” Shay Stein, a Redfin Premier agent in Las Vegas, said in the report. “There are more listings hitting the market, but a lot of them aren’t in good condition or they’re not in a desirable neighborhood — and sellers are pricing unrealistically high. A lot of sellers are willing to let their home sit on the market until they get the price they want, and a lot of buyers aren’t willing to pay sky-high prices when mortgage rates are still high. My advice to serious sellers is to price fairly and make cosmetic repairs before listing.”