After an astonishing 114 consecutive months of year-over-year home price gains, existing home sales eased two percent on a seasonally adjusted annual rate between July and August 2021. Have rising home prices finally become too much for homebuyers? Not yet. The median existing-home sales price rose 15% year-over-year, according to The National Association of REALTORS (NAR), largely due to a continuing dearth of available homes for sale. Existing supplies nationwide are at a meager 2.6 months on hand, which means that at the current sales pace, supplies would end quickly.
Most impacted by slim inventories and rising prices are first-time buyers who accounted for 29% of sales in August, down from 30% in July and down from 33% a year ago in August 2020. So, what does this mean for you – the homebuyer who may feel discouraged?
Lawrence Yun, NAR’s chief economist, said that “potential buyers are out and about searching, but much more measured about their financial limits, and simply waiting for more inventory.”
With winter approaching, housing sales tend to slow, especially with holidays pending. This affords buyers more opportunity to purchase a home “in the off season.” In addition, when buyers are pushed to their limits, they begin to withdraw from the hunt, leaving sellers with fewer showing and offers.
Stay firm. Don’t “offer over list price” or try to compete with all-cash offers from corporate buyers. Eventually, prices will come down, and near-record-low interest rates will continue to be available for some time to come.