Why Buyers Are Moving Slowly Despite Market Improvements
Even with mortgage rates easing, more homes available, and slower price increases, buyers are still taking their time committing to a purchase. According to the National Association of REALTORS® (NAR), contract signings reflected by pending sales for homes barely moved in July. Pending sales slipped 0.4% from June and rose only 0.7% compared to last year. You can read the full article here.
What Is Holding Buyers Back
Lawrence Yun, chief economist at NAR, explained that buying a home is the most expensive decision most people will ever make. It is natural for buyers to hesitate because they want to be certain the timing and the home are right.
Even though buyers are cautious, there are signs of momentum. Mortgage applications for purchase loans have risen by double digits compared to a year ago. Serious buyers are in the market, but many are waiting to sign until they feel fully confident. Yun also noted that if the Federal Reserve lowers interest rates, more qualified buyers may enter the market in the months ahead.
Why Now Might Be a Good Time to Buy
Buyers who are ready now could be in a strong position. Housing inventory is at its highest level since 2020. Home prices are rising at the slowest pace since 2023, and wage growth is outpacing price growth. Many sellers are reducing prices, which creates negotiating power for buyers.
Regional Activity
Pending sales activity in July varied across the country. The Northeast slipped slightly month over month and year over year. The Midwest fell compared to June but was up compared to last year. The South remained stable month to month but showed growth compared to last year. The West recorded the strongest monthly increase but was still lower than last year.
What This Means for You
The current market favors buyers who are prepared. Inventory is higher, price growth is slower, and buyers have more leverage than they have had in years. Once interest rates move lower, competition will likely increase again, which could reduce some of that advantage.
Final Thought
The housing market is improving, but buyers are still cautious. If you are considering a move, now may be the right moment to take advantage of the conditions before more competition enters.
If you want to talk about what this market means for you, reach out to me directly. I am happy to answer your questions and I can connect you with a trusted real estate professional who will help you buy or sell with confidence.
