The housing market is experiencing a shift as more homeowners list their properties for sale, leading to an increase in new listings. However, due to high prices and interest rates, potential buyers are being deterred from entering the market. As a result, homes are taking longer to sell, with an increasing number remaining on the market for an extended period of time without going under contract.
The market is facing a slowdown as homes are not selling as quickly as they are being listed. This has led to an accumulation of inventory, with the number of homes on the market rising compared to last year. Despite the recent increase in supply, the housing inventory in the United States is still significantly below pre-pandemic levels, creating a housing unit deficit of about 4.3 million homes.
Buyers are being cautious due to high mortgage rates and housing affordability challenges. The inability to secure lower mortgage rates is limiting the ability of buyers to enter the market, as financial strain and lack of motivation may be hindering their decision-making. Mortgage rates have remained high, with minimal movement expected in the near term following the Federal Reserve’s decision to hold rates steady at their June meeting.
Some markets in the U.S. are experiencing a rise in unsold inventory, giving buyers more options and bargaining power. In areas like Dallas, Fort Lauderdale, Tampa, and Jacksonville, a significant percentage of listings are remaining on the market for longer periods. This could present an opportunity for buyers to negotiate and potentially purchase properties below their listed price, especially if issues are discovered during the inspection process.
Home sellers facing tight inventory situations may need to consider price cuts to attract interest and ensure a successful sale. While some markets remain in favor of sellers, those experiencing high levels of unsold listings may need to adjust their asking price to accommodate market conditions. It is important for sellers to be prepared to make concessions if necessary to facilitate a timely sale, as price cuts have been shown to increase buyer interest and lead to successful transactions.
