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As mortgage payments skyrocket and competition eases, homebuyers are gaining more time and options in home search, according to a new report released Tuesday by list giant Zillow.
Less competition gives those who stay in the market an edge and more flexibility for those who have the means to buy a home compared to a few months before interest rates fell below 3%. I found out. competition was Historically high.
“Those who can survive this cost-rising storm have a otherwise less stressful buying experience compared to the 2021 pandemic-fueled real estate surge.” Jeff Tucker, Zillow’s senior economist said in a statement. “They have more tour options, more time to find the right home, and less likely to face a bidding war.”
Despite some relief, the market is far from home buyer friendly, with buyers paying more than 75% of normal. Mortgage payment Tucker said more than they paid in 2019.
“Despite this initial move towards rebalancing, markets are still less buyer-friendly than pre-pandemic standards in most parts of the country,” he said. “Homeseekers, which are being cut today, are eagerly looking forward to lower prices and mortgage rates so they can return to the ring.”
Inventories have increased steadily over the past few months, with inventory shortages declining from 30.4% in January to 9.1% in June, according to the report. However, the inventory gap caused by the pandemic has not yet been closed, with inventories down 46% from June 2019.
Inventories have returned to near 2019 levels in some of the country’s most expensive cities, such as Austin, San Francisco, Phoenix and Seattle, due to price spikes. The report believes that competition in these cities eased faster than the national average, giving homebuyers slightly more time to consider options.
In addition, as homebuyers are facing soaring mortgages, the share of reduced homes is rising nationwide, reaching 14.8%. In cities like Salt Lake City, Sacramento and Phoenix, where prices have risen faster than ever before, the share of price cuts is highest at 24.1%, 21.7% and 20.4%, respectively.
Sales are sluggish because homebuyers don’t have affordable options, according to the report. Of the 15 cities that saw the largest month-on-month decline in contracted housing, 12 were one of the most expensive cities in the country to buy. In June, San Jose was 23.9%, Seattle was 23.9%, and Salt Lake City was 20.8%.
The report also found that rent increases were mitigated, rising 0.8% to 2,007 per month during May. This is the first time the price has exceeded $ 2,000. Annual rent growth settled from 17.2% in February to 14.8% in June. This is a much higher rate than usual, rising 24.6% since June 2019.
“The sharp rise in rents that peaked in February was likely a one-off event caused by a return to the city or a move from a shared apartment or home,” Tucker said. .. “We expect rent growth to slow in the coming months as vacancy rates hit record lows. One of the factors that could delay the return to normal is the cost of buying a home. It’s expensive. This will cause many lessors to renew their rental contracts instead. “