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A few months ago, the housing market was in overdrive: rising home prices, historically low interest rates and relentless demand. However, data now suggests to some experts that the market is in a “housing recession.”
For example, Existing home sales fell 5.9% in July Since June, it marks the sixth straight month of declines — and a drop of more than 20% from a year ago. Moreover, industry layoffs and job growth have been slowerthe mood of house builders became negative and buyers cancel contracts in the face of interest rates In 2022, it increased from 3.3% to 5.72%.
“We are witnessing a housing recession in terms of home sales and home construction decline,” said Lawrence Yun, chief economist for the National Association of Realtors. the latest report says.
But at this point, it’s a different story for homeowners, buyers and sellers.
“It’s not a recession in home prices,” Yun said. “Inventory remains tight and prices continue to rise across the country, with nearly 40% of homes still commanding full list price.”
But there are signs that the market will change in favor of buyers.
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“The owners are very comfortable”
“Prices are still rising in almost all markets across the country … and inventory is improving a little bit, but not by much,” Yun told CNBC.
“Homeowners are in a very comfortable position financially, in terms of housing wealth,” Yun said. That too recently said homeowners are “not quite” in recession.
Existing home sales fell 20.2% to 4.8 million properties in July from 6 million a year ago, according to NAR. However, the median price last month was $403,800, up 10.8% from July 2021.
With interest rates nearly double what they were six months ago, buyers were finding it more difficult to get a loan or pay higher rates.
“I see homebuyers cancel when the payments are a little higher than they expected — I’m talking $100,” said Al Bingham, a mortgage loan officer at Momentum Loans in Sandy, Utah. “Homebuyers are very cautious right now.”
Buyers may experience a “more balanced market.”
It is a decrease in demand for buyers generally good newsexperts say.
“Buyers should expect to be able to negotiate a little better price,” Yun said. “Last year, sellers had a mercy for what they wanted … and there were a lot of offers. Buyers may not be facing that now.”
While this depends on the specific market, shoppers are more likely to see a more normal shopping experience. In some places, the slowdown means less competition and sellers more likely to accept offers that come with contingencies — As a buyer, you must sell your home first.
“We see the contingencies being accepted, and that’s not happening,” said Stephen Rinaldi, president and founder of the Rinaldi Group, a mortgage brokerage based near Philadelphia. “We will probably see a more balanced market.”
Sellers ‘must be realistic’
Sellers may also want this temper their expectations.
“Sellers have to be realistic about the changing market,” Yun said. “They can’t just list their home at a high price and expect to find a buyer easily.
“Too many buyers chasing too few properties – those days are over,” he said.
At the same time, men are still selling fast. Properties stayed on the market for 14 days in July, compared with a typical 17 days a year ago, according to the Realtors association.
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