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Multiple Offers Ease as Affordability Is Further Eroded

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While it’s always good to know where the real estate market is today, it’s imperative to keep all data in perspective.monthly REALTORS® Reliability Index It helps dispel many myths and cut through the noise of what’s going on in the market right now.

A monthly report is released on the NAR’s existing home sales and provides an explanation of the housing market. Specifically, the report answers who your buyers are, how they are buying, and where they are buying. The report addresses sellers’ experiences with offers, days in the market, and contingencies.

Inventory remains in short supply, as reported in the latest NAR existing home sales data, which suggests housing is still moving at a fast pace despite recent interest rate and house price increases. I mean He averages just 16 days in the market, up from his 14 days in the last two months. In contrast, it took him 96 days to sell a home in 2011.

The market has shrunk, especially as there are fewer buyers available in the market today, but in many parts of the country the market still remains a seller’s market. There were 2.5 offers for all listed homes. This is down from a frenzied market from his April of this year, when every home listed had his 5.5 offers.

Line chart: average number of offers received in the most recent sale from October 2015 to July 2022

One way to understand the competitiveness of the market is to notice that buyers are abandoning contingencies. This data series is shorter, but reflects a slight relaxation to reflect the number of offers for each home. Nearly a third of his buyers waived an inspection or assessment contingency, both of which he was down just over 20% last month.

Line chart: buyers who avoided the surprise from April 2021 to August 2022

It’s important to note that nearly a quarter of the homebuying market is paying all cash. The percentage of people who make all-cash purchases is now 24%. The most recent high for an all-cash purchaser was 35% for him in 2014.

Line Chart: All Cash Buyers, Oct 2008 to Jul 2022

Another measure of the housing market is whether REALTOR® had any slow-growing customers in the last month. Homeowners typically hold stock in their homes as home prices continue to rise. Selling defective products is not common today. In 2008, 49% of REALTORS® had clients that failed to sell. Today, just 1%.

Line chart: Distressed sales (foreclosed or short sold) from October 2088 to July 2022

Non-primary homebuyers are now at 16%, up from 14% last month. This is a recent rise, but there is monthly volatility in the data. This is down from the January 2022 series high of 22%.

Line chart: non-primary homebuyers, October 2015 to July 2022

Unfortunately, only 29% of first-time buyers last month. This isn’t the highest we’ve seen in 2010, when the first-time homebuyer tax credit existed (and there was a fair amount of inventory in the housing market), but it’s also not the historical norm of 40% seen on an annual average. . Home Buyer and Seller Profiles report. The share of first-time buyers may continue to be impacted by rising interest rates that erode home affordability.

Line Chart: First Time Buyer Share, Oct 2008 - Jul 2022

To read the monthly details REALTORS® Reliability Indexcheck out the full report on the same day Second-hand home sales Data are publicly available.

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